Here's Why Evertz Technologies Limited's (TSE:ET) CEO Compensation Is The Least Of Shareholders Concerns

Performance at Evertz Technologies Limited (TSE:ET) has been rather uninspiring recently and shareholders may be wondering how CEO Romolo Magarelli plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 06 October 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Evertz Technologies

How Does Total Compensation For Romolo Magarelli Compare With Other Companies In The Industry?

According to our data, Evertz Technologies Limited has a market capitalization of CA$1.1b, and paid its CEO total annual compensation worth CA$1.0m over the year to April 2021. That's a slight decrease of 7.5% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$344k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$510m and CA$2.0b had a median total CEO compensation of CA$4.5m. This suggests that Romolo Magarelli is paid below the industry median. Moreover, Romolo Magarelli also holds CA$345m worth of Evertz Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. Evertz Technologies 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.

Evertz Technologies Limited's Growth

Earnings per share at Evertz Technologies Limited are much the same as they were three years ago, albeit slightly lower. It saw its revenue drop 1.5% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Evertz Technologies Limited Been A Good Investment?

With a total shareholder return of 5.0% over three years, Evertz Technologies Limited has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Evertz Technologies that you should be aware of before investing.

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.

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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