Here's What We Think About MedMira's (CVE:MIR) CEO Pay

Hermes Chan has been the CEO of MedMira Inc. (CVE:MIR) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for MedMira.

See our latest analysis for MedMira

Comparing MedMira Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that MedMira Inc. has a market capitalization of CA$161m, and reported total annual CEO compensation of CA$151k for the year to July 2020. Notably, that's a decrease of 21% over the year before. Notably, the salary of CA$151k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below CA$255m, reported a median total CEO compensation of CA$347k. This suggests that Hermes Chan is paid below the industry median. What's more, Hermes Chan holds CA$731k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Speaking on a company level, MedMira prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at MedMira Inc.'s Growth Numbers

MedMira Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 428% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MedMira Inc. Been A Good Investment?

We think that the total shareholder return of 940%, over three years, would leave most MedMira Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

MedMira pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Hermes is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Hermes deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for MedMira that investors should be aware of in a dynamic business environment.

Important note: MedMira is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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