Here's Why Shareholders May Want To Be Cautious With Increasing ZoomerMedia Limited's (CVE:ZUM) CEO Pay Packet

Under the guidance of CEO Moses Znaimer, ZoomerMedia Limited (CVE:ZUM) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 22 February 2023. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for ZoomerMedia

Comparing ZoomerMedia Limited's CEO Compensation With The Industry

At the time of writing, our data shows that ZoomerMedia Limited has a market capitalization of CA$40m, and reported total annual CEO compensation of CA$1.6m for the year to August 2022. Notably, that's an increase of 10% over the year before. In particular, the salary of CA$1.53m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Canadian Media industry with market capitalizations under CA$268m, the reported median total CEO compensation was CA$553k. This suggests that Moses Znaimer is paid more than the median for the industry. Furthermore, Moses Znaimer directly owns CA$26m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	CA$1.5m	CA$1.4m	96%
Other	CA$60k	CA$60k	4%
Total Compensation	CA$1.6m	CA$1.4m	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. ZoomerMedia has gone down a largely traditional route, paying Moses Znaimer a high salary, giving it preference over non-salary benefits. 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.

A Look at ZoomerMedia Limited's Growth Numbers

Over the last three years, ZoomerMedia Limited has shrunk its earnings per share by 19% per year. Its revenue is up 16% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has ZoomerMedia Limited Been A Good Investment?

Most shareholders would probably be pleased with ZoomerMedia Limited for providing a total return of 36% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

ZoomerMedia pays its CEO a majority of compensation through a salary. The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for ZoomerMedia that investors should look into moving forward.

Important note: ZoomerMedia 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.