Here's Why Playgon Games Inc.'s (CVE:DEAL) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• Playgon Games to hold its Annual General Meeting on 1st of December
• Total pay for CEO Darcy Krogh includes CA$220.0k salary
• The total compensation is 41% less than the average for the industry
• Over the past three years, Playgon Games' EPS fell by 13% and over the past three years, the total loss to shareholders 85%

Performance at Playgon Games Inc. (CVE:DEAL) has been rather uninspiring recently and shareholders may be wondering how CEO Darcy Krogh plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 1st of December. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Playgon Games

Comparing Playgon Games Inc.'s CEO Compensation With The Industry

According to our data, Playgon Games Inc. has a market capitalization of CA$19m, and paid its CEO total annual compensation worth CA$220k over the year to December 2022. There was no change in the compensation compared to last year. Notably, the salary of CA$220k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Canadian Interactive Media and Services industry with market capitalizations below CA$273m, we found that the median total CEO compensation was CA$372k. That is to say, Darcy Krogh is paid under the industry median. Furthermore, Darcy Krogh directly owns CA$506k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	CA$220k	CA$220k	100%
Other	-	-	-
Total Compensation	CA$220k	CA$220k	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, Playgon Games prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Playgon Games Inc.'s Growth

Over the last three years, Playgon Games Inc. has shrunk its earnings per share by 13% per year. Its revenue is up 153% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Playgon Games Inc. Been A Good Investment?

The return of -85% over three years would not have pleased Playgon Games Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Playgon Games rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss is certainly disheartening. The downward trend in share price performance may be attributable to the the fact that earnings growth has gone backwards. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 7 warning signs for Playgon Games (5 are a bit concerning!) that you should be aware of before investing here.

Important note: Playgon Games is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.