Peter Brereton became the CEO of Tecsys Inc. (TSE:TCS) in 1998, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Tecsys pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Tecsys Inc.'s CEO Compensation With the industry
Our data indicates that Tecsys Inc. has a market capitalization of CA$703m, and total annual CEO compensation was reported as CA$1.5m for the year to April 2020. We note that's an increase of 21% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$443k.
For comparison, other companies in the same industry with market capitalizations ranging between CA$254m and CA$1.0b had a median total CEO compensation of CA$1.2m. This suggests that Tecsys remunerates its CEO largely in line with the industry average. What's more, Peter Brereton holds CA$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 77% of total compensation out of all the companies we analyzed, while other remuneration made up 23% of the pie. In Tecsys' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Tecsys Inc.'s Growth
Over the last three years, Tecsys Inc. has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 25%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Tecsys Inc. Been A Good Investment?
Most shareholders would probably be pleased with Tecsys Inc. for providing a total return of 201% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Tecsys Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently On a sour note, EPS growth has been negative. Considering overall performance, it's fair to say Peter is paid reasonably.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Tecsys that investors should think about before committing capital to this stock.
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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