Ryan Schneider became the CEO of Computer Modelling Group Ltd. (TSE:CMG) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Computer Modelling Group.
How Does Total Compensation For Ryan Schneider Compare With Other Companies In The Industry?
Our data indicates that Computer Modelling Group Ltd. has a market capitalization of CA$389m, and total annual CEO compensation was reported as CA$901k for the year to March 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$391k.
On comparing similar companies from the same industry with market caps ranging from CA$256m to CA$1.0b, we found that the median CEO total compensation was CA$2.1m. That is to say, Ryan Schneider is paid under the industry median. What's more, Ryan Schneider holds CA$161k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 38% of total compensation out of all the companies we analyzed, while other remuneration made up 62% of the pie. Computer Modelling Group pays out 43% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Computer Modelling Group Ltd.'s Growth
Over the last three years, Computer Modelling Group Ltd. has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is down 7.5%.
A lack of EPS improvement is not good to see. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Computer Modelling Group Ltd. Been A Good Investment?
Since shareholders would have lost about 43% over three years, some Computer Modelling Group Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Ryan is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Computer Modelling Group that investors should think about before committing capital to this stock.
Switching gears from Computer Modelling Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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