Here's Why Shareholders Should Examine Medicure Inc.'s (CVE:MPH) CEO Compensation Package More Closely

The results at Medicure Inc. (CVE:MPH) have been quite disappointing recently and CEO Albert Friesen bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 21 June 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Medicure

How Does Total Compensation For Albert Friesen Compare With Other Companies In The Industry?

Our data indicates that Medicure Inc. has a market capitalization of CA$12m, and total annual CEO compensation was reported as CA$331k for the year to December 2020. We note that's a small decrease of 4.5% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$331k.

In comparison with other companies in the industry with market capitalizations under CA$243m, the reported median total CEO compensation was CA$282k. This suggests that Medicure remunerates its CEO largely in line with the industry average. What's more, Albert Friesen holds CA$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	CA$331k	CA$331k	100%
Other	-	CA$16k	-
Total Compensation	CA$331k	CA$347k	100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. Speaking on a company level, Medicure prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Medicure Inc.'s Growth

Over the last three years, Medicure Inc. has shrunk its earnings per share by 97% per year. In the last year, its revenue is down 26%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Medicure Inc. Been A Good Investment?

Few Medicure Inc. shareholders would feel satisfied with the return of -85% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Medicure pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 Medicure (2 can't be ignored!) that you should be aware of before investing here.

Switching gears from Medicure, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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