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Does Clearford Water Systems' (CVE:CLI) CEO Salary Compare Well With Industry Peers?

Kevin Loiselle has been the CEO of Clearford Water Systems Inc. (CVE:CLI) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Clearford Water Systems

How Does Total Compensation For Kevin Loiselle Compare With Other Companies In The Industry?

At the time of writing, our data shows that Clearford Water Systems Inc. has a market capitalization of CA$2.0m, and reported total annual CEO compensation of CA$439k for the year to December 2019. We note that's a decrease of 24% compared to last year. We note that the salary portion, which stands at CA$300.0k constitutes the majority of total compensation received by the CEO.

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On comparing similar-sized companies in the industry with market capitalizations below CA$257m, we found that the median total CEO compensation was CA$368k. From this we gather that Kevin Loiselle is paid around the median for CEOs in the industry.

Component

2019

2018

Proportion (2019)

Salary

CA$300k

CA$300k

68%

Other

CA$139k

CA$276k

32%

Total Compensation

CA$439k

CA$576k

100%

Speaking on an industry level, nearly 35% of total compensation represents salary, while the remainder of 65% is other remuneration. It's interesting to note that Clearford Water Systems pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Clearford Water Systems Inc.'s Growth

Over the last three years, Clearford Water Systems Inc. has shrunk its earnings per share by 27% per year. In the last year, its revenue is up 20%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Clearford Water Systems Inc. Been A Good Investment?

Given the total shareholder loss of 87% over three years, many shareholders in Clearford Water Systems Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Clearford Water Systems pays its CEO in line with similar-sized companies belonging to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. On the other hand, shareholder returns for Kevin are negative over the same period. EPS is also not growing, undoubtedly leading to further headaches. Overall, we wouldn't say CEO is highly paid, but shareholders might not go for a raise before business metrics start to improve precipitously.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Clearford Water Systems (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.