Shareholders will probably not be disappointed by the robust results at NexgenRx Inc. (CVE:NXG) recently and they will be keeping this in mind as they go into the AGM on 10 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Comparing NexgenRx Inc.'s CEO Compensation With the industry
According to our data, NexgenRx Inc. has a market capitalization of CA$21m, and paid its CEO total annual compensation worth CA$153k over the year to December 2020. That's a notable decrease of 16% on last year. In particular, the salary of CA$139.9k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under CA$241m, the reported median total CEO compensation was CA$417k. Accordingly, NexgenRx pays its CEO under the industry median. Furthermore, Ron Loucks directly owns CA$2.2m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 26% of total compensation represents salary and 74% is other remuneration. NexgenRx is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
NexgenRx Inc.'s Growth
Over the past three years, NexgenRx Inc. has seen its earnings per share (EPS) grow by 128% per year. In the last year, its revenue is up 4.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has NexgenRx Inc. Been A Good Investment?
NexgenRx Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
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 3 warning signs for NexgenRx that you should be aware of before investing.
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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