We Think Some Shareholders May Hesitate To Increase Firan Technology Group Corporation's (TSE:FTG) CEO Compensation
In the past three years, the share price of Firan Technology Group Corporation (TSE:FTG) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20 April 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Firan Technology Group
How Does Total Compensation For Brad Bourne Compare With Other Companies In The Industry?
According to our data, Firan Technology Group Corporation has a market capitalization of CA$53m, and paid its CEO total annual compensation worth CA$522k over the year to November 2020. We note that's a small decrease of 4.7% on last year. Notably, the salary which is CA$338.3k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below CA$251m, we found that the median total CEO compensation was CA$217k. This suggests that Brad Bourne is paid more than the median for the industry. Moreover, Brad Bourne also holds CA$5.5m worth of Firan Technology Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | CA$338k | CA$338k | 65% |
| Other | CA$184k | CA$209k | 35% |
| Total Compensation | CA$522k | CA$548k | 100% |
On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. It's interesting to note that Firan Technology Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Firan Technology Group Corporation's Growth Numbers
Over the past three years, Firan Technology Group Corporation has seen its earnings per share (EPS) grow by 2.4% per year. Its revenue is down 9.1% over the previous year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Firan Technology Group Corporation Been A Good Investment?
Given the total shareholder loss of 4.0% over three years, many shareholders in Firan Technology Group Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. 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.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Firan Technology Group that investors should look into moving forward.
Switching gears from Firan Technology Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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About TSX:FTG
Firan Technology Group
Manufactures and sells aerospace and defense electronic products and subsystems in Canada, the United States, Asia, Europe, and rest of Americas.
Undervalued with excellent balance sheet.
