Stock Analysis

There Could Be A Chance NanoXplore Inc.'s (TSE:GRA) CEO Will Have Their Compensation Increased

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TSX:GRA
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Shareholders will be pleased by the robust performance of NanoXplore Inc. (TSE:GRA) recently and this will be kept in mind in the upcoming AGM on 22 December 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

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How Does Total Compensation For Soroush Nazarpour Compare With Other Companies In The Industry?

According to our data, NanoXplore Inc. has a market capitalization of CA$1.0b, and paid its CEO total annual compensation worth CA$694k over the year to June 2021. Notably, that's an increase of 34% over the year before. In particular, the salary of CA$396.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between CA$516m and CA$2.1b, we discovered that the median CEO total compensation of that group was CA$2.7m. That is to say, Soroush Nazarpour is paid under the industry median. Moreover, Soroush Nazarpour also holds CA$76m worth of NanoXplore stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary CA$397k CA$385k 57%
Other CA$297k CA$135k 43%
Total CompensationCA$694k CA$520k100%

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. NanoXplore sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
TSX:GRA CEO Compensation December 16th 2021

NanoXplore Inc.'s Growth

NanoXplore Inc. has seen its earnings per share (EPS) increase by 1.2% a year over the past three years. In the last year, its revenue is up 28%.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has NanoXplore Inc. Been A Good Investment?

Boasting a total shareholder return of 420% over three years, NanoXplore Inc. 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.

To Conclude...

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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in NanoXplore we think you should know about.

Switching gears from NanoXplore, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Valuation is complex, but we're helping make it simple.

Find out whether NanoXplore is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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