In 2006 Brian Balbirnie was appointed CEO of Issuer Direct Corporation (NYSEMKT:ISDR). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Brian Balbirnie’s Compensation Compare With Similar Sized Companies?
Our data indicates that Issuer Direct Corporation is worth US$45m, and total annual CEO compensation was reported as US$218k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$200k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$530k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Issuer Direct has changed from year to year.
Is Issuer Direct Corporation Growing?
On average over the last three years, Issuer Direct Corporation has shrunk earnings per share by 25% each year (measured with a line of best fit). Its revenue is up 14% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Issuer Direct Corporation Been A Good Investment?
Most shareholders would probably be pleased with Issuer Direct Corporation for providing a total return of 38% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Issuer Direct Corporation is currently paying its CEO below what is normal for companies of its size.
It’s well worth noting that while Brian Balbirnie is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Issuer Direct (free visualization of insider trades).
Important note: Issuer Direct may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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