Yahoo Finance Here's What We Think About Armada Data's (CVE:ARD) CEO Pay
R. Matthews became the CEO of Armada Data Corporation (CVE:ARD) in 2000, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Armada Data
Comparing Armada Data Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Armada Data Corporation has a market capitalization of CA$2.5m, and reported total annual CEO compensation of CA$109k for the year to May 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CA$102.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below CA$257m, reported a median total CEO compensation of CA$276k. In other words, Armada Data pays its CEO lower than the industry median. What's more, R. Matthews holds CA$533k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$102k | CA$102k | 93% |
Other | CA$7.2k | CA$7.2k | 7% |
Total Compensation | CA$109k | CA$109k | 100% |
On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. It's interesting to note that Armada Data 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.
A Look at Armada Data Corporation's Growth Numbers
Over the last three years, Armada Data Corporation has shrunk its earnings per share by 30% per year. It achieved revenue growth of 4.6% over the last year.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Armada Data Corporation Been A Good Investment?
Given the total shareholder loss of 12% over three years, many shareholders in Armada Data Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As previously discussed, R. is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that R. is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Armada Data (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Armada Data is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
