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Graeme Lempriere became the CEO of Clean Seed Capital Group Ltd. (CVE:CSX) in 2010, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Clean Seed Capital Group.
How Does Total Compensation For Graeme Lempriere Compare With Other Companies In The Industry?
Our data indicates that Clean Seed Capital Group Ltd. has a market capitalization of CA$28m, and total annual CEO compensation was reported as CA$200k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary of CA$200k is the entirety of the CEO compensation.
On comparing similar-sized companies in the industry with market capitalizations below CA$254m, we found that the median total CEO compensation was CA$305k. That is to say, Graeme Lempriere is paid under the industry median. What's more, Graeme Lempriere holds CA$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. On a company level, Clean Seed Capital Group prefers to reward its CEO through a salary, opting not to pay Graeme Lempriere through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Clean Seed Capital Group Ltd.'s Growth Numbers
Clean Seed Capital Group Ltd. has seen its earnings per share (EPS) increase by 37% a year over the past three years. Its revenue is up 22% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Clean Seed Capital Group Ltd. Been A Good Investment?
Given the total shareholder loss of 38% over three years, many shareholders in Clean Seed Capital Group Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Clean Seed Capital Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Clean Seed Capital Group pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say Graeme is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.
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 5 warning signs for Clean Seed Capital Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Clean Seed Capital Group 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.
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