Stock Analysis

How Does Century Global Commodities' (TSE:CNT) CEO Pay Compare With Company Performance?

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Sandy Chim has been the CEO of Century Global Commodities Corporation (TSE:CNT) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

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How Does Total Compensation For Sandy Chim Compare With Other Companies In The Industry?

Our data indicates that Century Global Commodities Corporation has a market capitalization of CA$16m, and total annual CEO compensation was reported as CA$370k for the year to March 2020. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$370k.

On comparing similar-sized companies in the industry with market capitalizations below CA$257m, we found that the median total CEO compensation was CA$150k. This suggests that Sandy Chim is paid more than the median for the industry. Furthermore, Sandy Chim directly owns CA$2.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary CA$370k CA$370k 100%
Other - - -
Total CompensationCA$370k CA$370k100%

On an industry level, around 93% of total compensation represents salary and 7.0% is other remuneration. On a company level, Century Global Commodities prefers to reward its CEO through a salary, opting not to pay Sandy Chim through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSX:CNT CEO Compensation December 29th 2020

Century Global Commodities Corporation's Growth

Over the past three years, Century Global Commodities Corporation has seen its earnings per share (EPS) grow by 3.8% per year. Its revenue is up 18% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Century Global Commodities Corporation Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Century Global Commodities Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Century Global Commodities rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Century Global Commodities pays its CEO higher than the norm for similar-sized companies belonging to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Century Global Commodities have arguably been worse, over the last three years. And the situation doesn't look all that good when you see Sandy is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Sandy's compensation grow without first seeing an improvement in the performance of the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Century Global Commodities (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Century Global Commodities 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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