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What We Learned About Skychain Technologies' (CVE:SCT) CEO Compensation
Bill Zhang became the CEO of Skychain Technologies Inc. (CVE:SCT) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Skychain Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Skychain Technologies
Comparing Skychain Technologies Inc.'s CEO Compensation With the industry
According to our data, Skychain Technologies Inc. has a market capitalization of CA$15m, and paid its CEO total annual compensation worth CA$72k over the year to March 2020. Notably, that's an increase of 41% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$72k.
In comparison with other companies in the industry with market capitalizations under CA$254m, the reported median total CEO compensation was CA$502k. Accordingly, Skychain Technologies pays its CEO under the industry median. What's more, Bill Zhang holds CA$174k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | CA$72k | CA$51k | 100% |
| Other | - | - | - |
| Total Compensation | CA$72k | CA$51k | 100% |
On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Speaking on a company level, Skychain Technologies prefers to tread along a traditional path, disbursing all compensation through a salary. 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 Skychain Technologies Inc.'s Growth Numbers
Over the last three years, Skychain Technologies Inc. has shrunk its earnings per share by 45% per year. Its revenue is up 77% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Skychain Technologies Inc. Been A Good Investment?
Given the total shareholder loss of 54% over three years, many shareholders in Skychain Technologies Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
Skychain Technologies pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Bill is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and EPS growth over the past three years are negative, which is cause for concern. On the flip side, recent revenue growth has been positive. So, although Bill is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.
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 6 warning signs (and 3 which are significant) in Skychain Technologies we think you should know about.
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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About TSXV:SCT.H
Skychain Technologies
Provides power and energy solutions for crypto miners in Canada.
Medium-low with weak fundamentals.
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