A Quick Analysis On Neovasc's (TSE:NVCN) CEO Compensation

Fred Colen became the CEO of Neovasc Inc. (TSE:NVCN) 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Neovasc

How Does Total Compensation For Fred Colen Compare With Other Companies In The Industry?

At the time of writing, our data shows that Neovasc Inc. has a market capitalization of CA$75m, and reported total annual CEO compensation of US$1.5m for the year to December 2019. We note that's an increase of 8.9% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$402k.

In comparison with other companies in the industry with market capitalizations under CA$264m, the reported median total CEO compensation was US$346k. This suggests that Fred Colen is paid more than the median for the industry.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Neovasc sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Neovasc Inc.'s Growth Numbers

Over the past three years, Neovasc Inc. has seen its earnings per share (EPS) grow by 45% per year. It saw its revenue drop 7.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Neovasc Inc. Been A Good Investment?

Since shareholders would have lost about 100% over three years, some Neovasc Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Fred is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Neovasc (1 can't be ignored!) that you should be aware of before investing here.

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

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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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