Shareholders May Be A Bit More Conservative With Synex International Inc.'s (TSE:SXI) CEO Compensation For Now

In the past three years, the share price of Synex International Inc. (TSE:SXI) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 25 November 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Synex International

How Does Total Compensation For Daniel Russell Compare With Other Companies In The Industry?

At the time of writing, our data shows that Synex International Inc. has a market capitalization of CA$12m, and reported total annual CEO compensation of CA$236k for the year to June 2021. That's a notable increase of 8.9% on last year. Notably, the salary which is CA$208.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$252m, reported a median total CEO compensation of CA$236k. This suggests that Synex International remunerates its CEO largely in line with the industry average. What's more, Daniel Russell holds CA$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	CA$208k	CA$208k	88%
Other	CA$28k	CA$9.0k	12%
Total Compensation	CA$236k	CA$217k	100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. It's interesting to note that Synex International pays out a greater portion of remuneration through salary, compared to the 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 Synex International Inc.'s Growth Numbers

Over the past three years, Synex International Inc. has seen its earnings per share (EPS) grow by 40% per year. Its revenue is up 7.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Synex International Inc. Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in Synex International Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Synex International (2 don't sit too well with us!) 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.

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.

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