Shareholders Will Probably Hold Off On Increasing Trxade Group, Inc.'s (NASDAQ:MEDS) CEO Compensation For The Time Being

By
Simply Wall St
Published
May 21, 2021
NasdaqCM:MEDS
Source: Shutterstock

Performance at Trxade Group, Inc. (NASDAQ:MEDS) has been reasonably good and CEO Suren Ajjarapu has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 27 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Trxade Group

How Does Total Compensation For Suren Ajjarapu Compare With Other Companies In The Industry?

At the time of writing, our data shows that Trxade Group, Inc. has a market capitalization of US$28m, and reported total annual CEO compensation of US$667k for the year to December 2020. Notably, that's a decrease of 11% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$286k.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$175k. This suggests that Suren Ajjarapu is paid more than the median for the industry. Furthermore, Suren Ajjarapu directly owns US$7.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$286k US$250k 43%
Other US$382k US$500k 57%
Total CompensationUS$667k US$750k100%

Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. According to our research, Trxade Group has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NasdaqCM:MEDS CEO Compensation May 22nd 2021

Trxade Group, Inc.'s Growth

Trxade Group, Inc. has reduced its earnings per share by 135% a year over the last three years. In the last year, its revenue is up 121%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Trxade Group, Inc. Been A Good Investment?

Trxade Group, Inc. has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

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 4 warning signs for Trxade Group that investors should think about before committing capital to this stock.

Switching gears from Trxade Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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