Yahoo Finance How Should Investors React To Tecsys' (TSE:TCS) CEO Pay?
This article will reflect on the compensation paid to Peter Brereton who has served as CEO of Tecsys Inc. (TSE:TCS) since 1998. 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 Tecsys
Comparing Tecsys Inc.'s CEO Compensation With the industry
Our data indicates that Tecsys Inc. has a market capitalization of CA$523m, and total annual CEO compensation was reported as CA$1.5m for the year to April 2020. We note that's an increase of 21% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$443k.
On comparing similar companies from the same industry with market caps ranging from CA$263m to CA$1.1b, we found that the median CEO total compensation was CA$2.0m. This suggests that Tecsys remunerates its CEO largely in line with the industry average. Furthermore, Peter Brereton directly owns CA$16m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$443k | CA$430k | 30% |
Other | CA$1.0m | CA$792k | 70% |
Total Compensation | CA$1.5m | CA$1.2m | 100% |
Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. Tecsys pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Tecsys Inc.'s Growth Numbers
Over the last three years, Tecsys Inc. has shrunk its earnings per share by 16% per year. In the last year, its revenue is up 31%.
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. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Tecsys Inc. Been A Good Investment?
Boasting a total shareholder return of 133% over three years, Tecsys Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, Tecsys Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors will be happy that Tecsys has produced strong shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a sour note, EPS growth has been negative. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Tecsys that investors should think about before committing capital to this 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.
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