We Discuss Why Armada Data Corporation's (CVE:ARD) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

The disappointing performance at Armada Data Corporation (CVE:ARD) will make some shareholders rather disheartened. The next AGM coming up on 17 November 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Armada Data

How Does Total Compensation For R. Matthews Compare With Other Companies In The Industry?

At the time of writing, our data shows that Armada Data Corporation has a market capitalization of CA$1.7m, and reported total annual CEO compensation of CA$109k for the year to May 2021. There was no change in the compensation compared to last year. We note that the salary portion, which stands at CA$102.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under CA$249m, the reported median total CEO compensation was CA$156k. In other words, Armada Data pays its CEO lower than the industry median. Moreover, R. Matthews also holds CA$338k worth of Armada Data stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	CA$102k	CA$102k	93%
Other	CA$7.2k	CA$7.2k	7%
Total Compensation	CA$109k	CA$109k	100%

On an industry level, around 77% of total compensation represents salary and 23% is other remuneration. According to our research, Armada Data has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Armada Data Corporation's Growth Numbers

Armada Data Corporation has reduced its earnings per share by 24% a year over the last three years. In the last year, its revenue is down 20%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Armada Data Corporation Been A Good Investment?

Since shareholders would have lost about 15% over three years, some Armada Data Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 5 warning signs (and 2 which can't be ignored) in Armada Data we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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