Steve King became the CEO of Alaris Equity Partners Income Trust (TSE:AD.UN) in 2004, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Alaris Equity Partners Income Trust pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Steve King Compare With Other Companies In The Industry?
At the time of writing, our data shows that Alaris Equity Partners Income Trust has a market capitalization of CA$437m, and reported total annual CEO compensation of CA$1.1m for the year to December 2019. We note that's a decrease of 46% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$356k.
On comparing similar companies from the same industry with market caps ranging from CA$264m to CA$1.1b, we found that the median CEO total compensation was CA$3.6m. Accordingly, Alaris Equity Partners Income Trust pays its CEO under the industry median.
Speaking on an industry level, nearly 41% of total compensation represents salary, while the remainder of 59% is other remuneration. It's interesting to note that Alaris Equity Partners Income Trust 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.
Alaris Equity Partners Income Trust's Growth
Alaris Equity Partners Income Trust has reduced its earnings per share by 17% a year over the last three years. Its revenue is down 69% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Alaris Equity Partners Income Trust Been A Good Investment?
With a three year total loss of 29% for the shareholders, Alaris Equity Partners Income Trust would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Alaris Equity Partners Income Trust pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Alaris Equity Partners Income Trust we think you should know about.
Switching gears from Alaris Equity Partners Income Trust, 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.
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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