Is CEMATRIX Corporation (CVE:CVX) Overpaying Its CEO?

In 2008 Jeff Kendrick was appointed CEO of CEMATRIX Corporation (CVE:CVX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CEMATRIX

How Does Jeff Kendrick’s Compensation Compare With Similar Sized Companies?

According to our data, CEMATRIX Corporation has a market capitalization of CA$9.8m, and pays its CEO total annual compensation worth CA$161k. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at CA$151k. We examined a group of similar sized companies, with market capitalizations of below CA$267m. The median CEO total compensation in that group is CA$142k.

So Jeff Kendrick is paid around the average of 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 a visual representation of the CEO compensation at CEMATRIX, below.

TSXV:CVX CEO Compensation, April 15th 2019
TSXV:CVX CEO Compensation, April 15th 2019

Is CEMATRIX Corporation Growing?

Over the last three years CEMATRIX Corporation has shrunk its earnings per share by an average of 88% per year (measured with a line of best fit). Its revenue is up 128% over last year.

Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has CEMATRIX Corporation Been A Good Investment?

Given the total loss of 51% over three years, many shareholders in CEMATRIX Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Jeff Kendrick is paid around what is normal the leaders of comparable size companies.

The per share growth could be better, in our view. And shareholder returns have been disappointing over the last three years. So it would take a bold person to suggest the pay is too modest. Whatever your view on compensation, you might want to check if insiders are buying or selling CEMATRIX shares (free trial).

Important note: CEMATRIX may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.