Is Ceapro Inc.’s (CVE:CZO) CEO Paid At A Competitive Rate?

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In 2012 Gilles Gagnon was appointed CEO of Ceapro Inc. (CVE:CZO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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 Ceapro

How Does Gilles Gagnon’s Compensation Compare With Similar Sized Companies?

Our data indicates that Ceapro Inc. is worth CA$31m, and total annual CEO compensation is CA$555k. (This number is for the twelve months until December 2018). That’s less than last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$480k. We looked at a group of companies with market capitalizations under CA$268m, and the median CEO total compensation was CA$150k.

Thus we can conclude that Gilles Gagnon receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ceapro Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Ceapro, below.

TSXV:CZO CEO Compensation, June 5th 2019
TSXV:CZO CEO Compensation, June 5th 2019

Is Ceapro Inc. Growing?

Ceapro Inc. has reduced its earnings per share by an average of 116% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 4.2% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. 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 Ceapro Inc. Been A Good Investment?

Since shareholders would have lost about 67% over three years, some Ceapro Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Ceapro Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Ceapro shares with their own money (free access).

If you want to buy a stock that is better than Ceapro, this free list of high return, low debt companies is a great place to look.

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.