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Increases to Absolute Software Corporation's (TSE:ABST) CEO Compensation Might Cool off for now
Under the guidance of CEO Christy Wyatt, Absolute Software Corporation (TSE:ABST) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14 December 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
View our latest analysis for Absolute Software
Comparing Absolute Software Corporation's CEO Compensation With the industry
Our data indicates that Absolute Software Corporation has a market capitalization of CA$558m, and total annual CEO compensation was reported as US$1.9m for the year to June 2021. Notably, that's an increase of 45% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$420k.
On comparing similar companies from the same industry with market caps ranging from CA$253m to CA$1.0b, we found that the median CEO total compensation was US$235k. Hence, we can conclude that Christy Wyatt is remunerated higher than the industry median. Moreover, Christy Wyatt also holds CA$1.1m worth of Absolute Software stock directly under their own name.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | US$420k | US$420k | 22% |
| Other | US$1.5m | US$895k | 78% |
| Total Compensation | US$1.9m | US$1.3m | 100% |
Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. In Absolute Software's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Absolute Software Corporation's Growth Numbers
Over the last three years, Absolute Software Corporation has shrunk its earnings per share by 21% per year. It achieved revenue growth of 27% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Absolute Software Corporation Been A Good Investment?
Boasting a total shareholder return of 46% over three years, Absolute Software Corporation has done well by shareholders. 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.
In Summary...
The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.
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 Absolute Software we think you should know about.
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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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
About TSX:ABST
Absolute Software
Absolute Software Corporation develops, markets, and provides software services that support the management and security of computing devices, applications, data, and networks for various organizations.
Undervalued average dividend payer.
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