Shareholders May Find It Hard To Justify Increasing Quorum Information Technologies Inc.'s (CVE:QIS) CEO Compensation For Now

Key Insights

• Quorum Information Technologies will host its Annual General Meeting on 28th of August
• Salary of CA$275.0k is part of CEO Maury Marks's total remuneration
• Total compensation is similar to the industry average
• Quorum Information Technologies' three-year loss to shareholders was 6.8% while its EPS grew by 77% over the past three years

As many shareholders of Quorum Information Technologies Inc. (CVE:QIS) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of August could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Quorum Information Technologies

How Does Total Compensation For Maury Marks Compare With Other Companies In The Industry?

At the time of writing, our data shows that Quorum Information Technologies Inc. has a market capitalization of CA$71m, and reported total annual CEO compensation of CA$275k for the year to December 2023. We note that's a decrease of 25% compared to last year. Notably, the salary of CA$275k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Canadian Software industry with market capitalizations below CA$272m, we found that the median total CEO compensation was CA$302k. So it looks like Quorum Information Technologies compensates Maury Marks in line with the median for the industry. Moreover, Maury Marks also holds CA$2.3m worth of Quorum Information Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$275k	CA$275k	100%
Other	-	CA$90k	-
Total Compensation	CA$275k	CA$365k	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. On a company level, Quorum Information Technologies prefers to reward its CEO through a salary, opting not to pay Maury Marks through non-salary benefits. 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.

Quorum Information Technologies Inc.'s Growth

Over the past three years, Quorum Information Technologies Inc. has seen its earnings per share (EPS) grow by 77% per year. Its revenue is up 1.7% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Quorum Information Technologies Inc. Been A Good Investment?

Given the total shareholder loss of 6.8% over three years, many shareholders in Quorum Information Technologies Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Quorum Information Technologies pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Quorum Information Technologies that investors should be aware of in a dynamic business environment.

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. 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.