Should You Worry About Wavefront Technology Solutions Inc.'s (CVE:WEE) CEO Salary Level?

In 2003 Brett Davidson was appointed CEO of Wavefront Technology Solutions Inc. (CVE:WEE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Wavefront Technology Solutions

How Does Brett Davidson's Compensation Compare With Similar Sized Companies?

Our data indicates that Wavefront Technology Solutions Inc. is worth CA$5.7m, and total annual CEO compensation was reported as CA$319k for the year to August 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$300k. We examined a group of similar sized companies, with market capitalizations of below CA$290m. The median CEO total compensation in that group is CA$225k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Wavefront Technology Solutions stands. On an industry level, roughly 42% of total compensation represents salary and 58% is other remuneration. It's interesting to note that Wavefront Technology Solutions pays out a greater portion of remuneration through salary, in comparison to the wider industry.

As you can see, Brett Davidson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Wavefront Technology Solutions Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see a visual representation of the CEO compensation at Wavefront Technology Solutions, below.

Is Wavefront Technology Solutions Inc. Growing?

On average over the last three years, Wavefront Technology Solutions Inc. has grown earnings per share (EPS) by 55% each year (using a line of best fit). Its revenue is down 13% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Wavefront Technology Solutions Inc. Been A Good Investment?

Since shareholders would have lost about 76% over three years, some Wavefront Technology Solutions Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Wavefront Technology Solutions Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shifting gears from CEO pay for a second, we've spotted 4 warning signs for Wavefront Technology Solutions you should be aware of, and 1 of them is potentially serious.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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