How Should Investors React To Skyline Investments' (TLV:SKLN) CEO Pay?

This article will reflect on the compensation paid to Blake Lyon who has served as CEO of Skyline Investments Inc. (TLV:SKLN) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Skyline Investments.

Check out our latest analysis for Skyline Investments

Comparing Skyline Investments Inc.'s CEO Compensation With the industry

Our data indicates that Skyline Investments Inc. has a market capitalization of ₪262m, and total annual CEO compensation was reported as CA$835k for the year to December 2019. That's a notable increase of 51% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$408k.

On comparing similar-sized companies in the industry with market capitalizations below ₪650m, we found that the median total CEO compensation was CA$571k. Hence, we can conclude that Blake Lyon is remunerated higher than the industry median.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. It's interesting to note that Skyline Investments allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Skyline Investments Inc.'s Growth

Skyline Investments Inc. has reduced its earnings per share by 106% a year over the last three years. In the last year, its revenue is down 41%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Skyline Investments Inc. Been A Good Investment?

With a three year total loss of 51% for the shareholders, Skyline Investments Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Blake is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Skyline Investments (2 can't be ignored!) that you should be aware of before investing here.

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.

When trading Skyline Investments or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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@simplywallst.com.