We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Imaflex Inc.'s (CVE:IFX) CEO For Now

Performance at Imaflex Inc. (CVE:IFX) has been reasonably good and CEO Joe Abbandonato has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Imaflex

Comparing Imaflex Inc.'s CEO Compensation With the industry

Our data indicates that Imaflex Inc. has a market capitalization of CA$71m, and total annual CEO compensation was reported as CA$166k for the year to December 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of CA$158.3k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$242m, we found that the median total CEO compensation was CA$85k. This suggests that Joe Abbandonato is paid more than the median for the industry. Moreover, Joe Abbandonato also holds CA$21m worth of Imaflex stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	CA$158k	CA$158k	95%
Other	CA$7.7k	CA$7.7k	5%
Total Compensation	CA$166k	CA$166k	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Imaflex is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Imaflex Inc.'s Growth Numbers

Over the past three years, Imaflex Inc. has seen its earnings per share (EPS) grow by 6.5% per year. It achieved revenue growth of 13% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. 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 Imaflex Inc. Been A Good Investment?

Boasting a total shareholder return of 60% over three years, Imaflex Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Imaflex pays its CEO a majority of compensation through a salary. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Imaflex that you should be aware of before investing.

Switching gears from Imaflex, 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.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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