Most Shareholders Will Probably Agree With Lingo Media Corporation's (CVE:LM) CEO Compensation

Shareholders may be wondering what CEO Gali Bar-Ziv plans to do to improve the less than great performance at Lingo Media Corporation (CVE:LM) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16 November 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Lingo Media

How Does Total Compensation For Gali Bar-Ziv Compare With Other Companies In The Industry?

According to our data, Lingo Media Corporation has a market capitalization of CA$2.7m, and paid its CEO total annual compensation worth CA$222k over the year to December 2020. That's a fairly small increase of 7.3% over the previous year. Notably, the salary which is CA$186.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$249m, the reported median total CEO compensation was CA$341k. That is to say, Gali Bar-Ziv is paid under the industry median.

Component	2020	2019	Proportion (2020)
Salary	CA$186k	CA$186k	84%
Other	CA$36k	CA$21k	16%
Total Compensation	CA$222k	CA$207k	100%

On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. Lingo Media pays out 84% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Lingo Media Corporation's Growth Numbers

Lingo Media Corporation has seen its earnings per share (EPS) increase by 136% a year over the past three years. It achieved revenue growth of 9.1% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Lingo Media Corporation Been A Good Investment?

Given the total shareholder loss of 25% over three years, many shareholders in Lingo Media 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...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. 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 did our research and identified 4 warning signs (and 2 which are a bit concerning) in Lingo Media we think you should know about.

Important note: Lingo Media 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.

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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