What Can We Make Of RevoluGROUP Canada's (CVE:REVO) CEO Compensation?

Steve Marshall has been the CEO of RevoluGROUP Canada Inc. (CVE:REVO) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether RevoluGROUP Canada pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for RevoluGROUP Canada

How Does Total Compensation For Steve Marshall Compare With Other Companies In The Industry?

Our data indicates that RevoluGROUP Canada Inc. has a market capitalization of CA$75m, and total annual CEO compensation was reported as CA$634k for the year to May 2020. Notably, that's an increase of 59% over the year before. In particular, the salary of CA$500.9k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$257m, reported a median total CEO compensation of CA$340k. Hence, we can conclude that Steve Marshall is remunerated higher than the industry median. Moreover, Steve Marshall also holds CA$10m worth of RevoluGROUP Canada stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 99% of total compensation represents salary and 1.2% is other remuneration. RevoluGROUP Canada sets aside a smaller share of compensation for salary, in comparison to the overall 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.

RevoluGROUP Canada Inc.'s Growth

RevoluGROUP Canada Inc. has reduced its earnings per share by 3.8% a year over the last three years. It achieved revenue growth of 76% over the last year.

Investors would be a bit wary of companies that have lower EPS 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 RevoluGROUP Canada Inc. Been A Good Investment?

Most shareholders would probably be pleased with RevoluGROUP Canada Inc. for providing a total return of 33% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Steve is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Still, shareholder returns over the last three years,and recent revenue growth have been trending northwards. The only sore spot is EPS growth, which is negative over the same period. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.

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 did our research and identified 7 warning signs (and 3 which are potentially serious) in RevoluGROUP Canada we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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