How Should Investors React To IBEX Technologies' (CVE:IBT) CEO Pay?

Paul Baehr is the CEO of IBEX Technologies Inc. (CVE:IBT), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for IBEX Technologies.

View our latest analysis for IBEX Technologies

Comparing IBEX Technologies Inc.'s CEO Compensation With the industry

Our data indicates that IBEX Technologies Inc. has a market capitalization of CA$6.2m, and total annual CEO compensation was reported as CA$348k for the year to July 2020. Notably, that's an increase of 41% over the year before. We note that the salary portion, which stands at CA$258.2k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$257m, we found that the median total CEO compensation was CA$313k. So it looks like IBEX Technologies compensates Paul Baehr in line with the median for the industry. What's more, Paul Baehr holds CA$614k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. According to our research, IBEX Technologies has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.

IBEX Technologies Inc.'s Growth

Over the last three years, IBEX Technologies Inc. has shrunk its earnings per share by 31% per year. In the last year, its revenue is up 22%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 IBEX Technologies Inc. Been A Good Investment?

IBEX Technologies Inc. has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, IBEX Technologies pays its CEO in line with similar-sized companies belonging to the same industry. But revenues have been growing at a healthy pace, more recently. Shareholder returns, in comparison, have not been as impressive during the same period. Additionally, shareholders would want to keep their eyes on EPS, since growth has been negative for the metric for the last three years. We wouldn't say compensation is inappropriate considering the stable performance, but shareholders might want to see some better numbers before warming to the idea of a bump.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for IBEX Technologies (2 are concerning!) that you should be aware of before investing here.

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.

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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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