Stock Analysis

We Think Some Shareholders May Hesitate To Increase Tecsys Inc.'s (TSE:TCS) CEO Compensation

TSX:TCS
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CEO Peter Brereton has done a decent job of delivering relatively good performance at Tecsys Inc. (TSE:TCS) recently. As shareholders go into the upcoming AGM on 11 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Tecsys

Comparing Tecsys Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Tecsys Inc. has a market capitalization of CA$805m, and reported total annual CEO compensation of CA$1.5m for the year to April 2021. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$456k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$501m and CA$2.0b had a median total CEO compensation of CA$346k. This suggests that Peter Brereton is paid more than the median for the industry. Furthermore, Peter Brereton directly owns CA$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20212020Proportion (2021)
Salary CA$456k CA$443k 31%
Other CA$1.0m CA$1.0m 69%
Total CompensationCA$1.5m CA$1.5m100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Tecsys sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
TSX:TCS CEO Compensation September 5th 2021

A Look at Tecsys Inc.'s Growth Numbers

Over the past three years, Tecsys Inc. has seen its earnings per share (EPS) grow by 18% per year. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tecsys Inc. Been A Good Investment?

Most shareholders would probably be pleased with Tecsys Inc. for providing a total return of 247% 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...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Tecsys that investors should be aware of in a dynamic business environment.

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. 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.
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