Shareholders May Be More Conservative With Logistec Corporation's (TSE:LGT.B) CEO Compensation For Now

In the past three years, shareholders of Logistec Corporation (TSE:LGT.B) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 04 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Logistec

How Does Total Compensation For Madeleine Paquin Compare With Other Companies In The Industry?

At the time of writing, our data shows that Logistec Corporation has a market capitalization of CA$513m, and reported total annual CEO compensation of CA$1.7m for the year to December 2020. We note that's a small decrease of 6.8% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$635k.

On comparing similar companies from the same industry with market caps ranging from CA$248m to CA$991m, we found that the median CEO total compensation was CA$388k. Hence, we can conclude that Madeleine Paquin is remunerated higher than the industry median. Moreover, Madeleine Paquin also holds CA$9.3m worth of Logistec 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$635k	CA$626k	37%
Other	CA$1.1m	CA$1.2m	63%
Total Compensation	CA$1.7m	CA$1.8m	100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. In Logistec's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Logistec Corporation's Growth Numbers

Logistec Corporation has seen its earnings per share (EPS) increase by 4.4% a year over the past three years. It saw its revenue drop 5.5% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Logistec Corporation Been A Good Investment?

Since shareholders would have lost about 12% over three years, some Logistec Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Logistec that investors should think about before committing capital to this stock.

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.
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