Arun Menawat has been the CEO of Profound Medical Corp. (TSE:PRN) since 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Arun Menawat’s Compensation Compare With Similar Sized Companies?
Our data indicates that Profound Medical Corp. is worth CA$269m, and total annual CEO compensation was reported as CA$856k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$648k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$134m to CA$535m. The median total CEO compensation was CA$934k.
So Arun Menawat receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Profound Medical has changed over time.
Is Profound Medical Corp. Growing?
Over the last three years Profound Medical Corp. has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). It achieved revenue growth of 60% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Profound Medical Corp. Been A Good Investment?
Boasting a total shareholder return of 143% over three years, Profound Medical Corp. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Arun Menawat is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Profound Medical shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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