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Increases to Quorum Information Technologies Inc.'s (CVE:QIS) CEO Compensation Might Cool off for now

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Quorum Information Technologies Inc. (CVE:QIS) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 08 October 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Quorum Information Technologies

Comparing Quorum Information Technologies Inc.'s CEO Compensation With the industry

According to our data, Quorum Information Technologies Inc. has a market capitalization of CA$76m, and paid its CEO total annual compensation worth CA$282k over the year to December 2020. That's a notable increase of 19% on last year. Notably, the salary which is CA$245.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below CA$253m, we found that the median total CEO compensation was CA$195k. Accordingly, our analysis reveals that Quorum Information Technologies Inc. pays Maury Marks north of the industry median. What's more, Maury Marks holds CA$2.5m 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$245k

CA$230k

87%

Other

CA$37k

CA$6.9k

13%

Total Compensation

CA$282k

CA$237k

100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. There isn't a significant difference between Quorum Information Technologies and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Quorum Information Technologies Inc.'s Growth

Over the last three years, Quorum Information Technologies Inc. has shrunk its earnings per share by 38% per year. In the last year, its revenue is up 7.2%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Quorum Information Technologies Inc. Been A Good Investment?

We think that the total shareholder return of 84%, over three years, would leave most Quorum Information Technologies Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Quorum Information Technologies (1 is significant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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