Legend Power Systems Inc.'s (CVE:LPS) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
- Legend Power Systems will host its Annual General Meeting on 11th of September
- Salary of CA$254.4k is part of CEO Randy Buchamer's total remuneration
- Total compensation is similar to the industry average
- Over the past three years, Legend Power Systems' EPS grew by 23% and over the past three years, the total loss to shareholders 41%
The underwhelming share price performance of Legend Power Systems Inc. (CVE:LPS) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 11th of September. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Legend Power Systems
Comparing Legend Power Systems Inc.'s CEO Compensation With The Industry
According to our data, Legend Power Systems Inc. has a market capitalization of CA$16m, and paid its CEO total annual compensation worth CA$264k over the year to September 2024. That's slightly lower by 7.2% over the previous year. In particular, the salary of CA$254.4k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the Canadian Electronic industry with market capitalizations under CA$277m, the reported median total CEO compensation was CA$264k. So it looks like Legend Power Systems compensates Randy Buchamer in line with the median for the industry. Furthermore, Randy Buchamer directly owns CA$316k worth of shares in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | CA$254k | CA$275k | 96% |
| Other | CA$9.6k | CA$9.6k | 4% |
| Total Compensation | CA$264k | CA$285k | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Legend Power Systems pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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 Legend Power Systems Inc.'s Growth Numbers
Legend Power Systems Inc. has seen its earnings per share (EPS) increase by 23% a year over the past three years. In the last year, its revenue is up 28%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Legend Power Systems Inc. Been A Good Investment?
With a total shareholder return of -41% over three years, Legend Power Systems Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Randy receives almost all of their compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Legend Power Systems (1 is significant!) that you should be aware of before investing here.
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.