We Think Some Shareholders May Hesitate To Increase JEMTEC Inc.'s (CVE:JTC) CEO Compensation

Key Insights

• JEMTEC to hold its Annual General Meeting on 30th of January
• CEO Eric Caton's total compensation includes salary of CA$254.6k
• The total compensation is similar to the average for the industry
• JEMTEC's EPS declined by 44% over the past three years while total shareholder loss over the past three years was 58%

Shareholders of JEMTEC Inc. (CVE:JTC) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 30th of January will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for JEMTEC

Comparing JEMTEC Inc.'s CEO Compensation With The Industry

According to our data, JEMTEC Inc. has a market capitalization of CA$2.6m, and paid its CEO total annual compensation worth CA$362k over the year to July 2024. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CA$254.6k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Canadian Electronic industry with market capitalizations below CA$288m, reported a median total CEO compensation of CA$375k. From this we gather that Eric Caton is paid around the median for CEOs in the industry. Moreover, Eric Caton also holds CA$542k worth of JEMTEC stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CA$255k	CA$255k	70%
Other	CA$108k	CA$110k	30%
Total Compensation	CA$362k	CA$365k	100%

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Our data reveals that JEMTEC allocates salary more or less in line with the wider market. 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.

A Look at JEMTEC Inc.'s Growth Numbers

JEMTEC Inc. has reduced its earnings per share by 44% a year over the last three years. In the last year, its revenue is up 23%.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JEMTEC Inc. Been A Good Investment?

Few JEMTEC Inc. shareholders would feel satisfied with the return of -58% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In 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 is in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 3 which don't sit too well with us) in JEMTEC we think you should know about.

Switching gears from JEMTEC, 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. 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.