Ron Sterne has been the CEO of Labrador Technologies Inc. (CVE:LTX) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ron Sterne’s Compensation Compare With Similar Sized Companies?
According to our data, Labrador Technologies Inc. has a market capitalization of CA$1.7m, and pays its CEO total annual compensation worth CA$96k. (This is based on the year to 2017). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$96k. We looked at a group of companies with market capitalizations under CA$268m, and the median CEO compensation was CA$158k.
A first glance this seems like a real positive for shareholders, since Ron Sterne is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Labrador Technologies, below.
Is Labrador Technologies Inc. Growing?
Over the last three years Labrador Technologies Inc. has grown its earnings per share (EPS) by an average of 27% per year. Its revenue is down -27% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Labrador Technologies Inc. Been A Good Investment?
Boasting a total shareholder return of 100% over three years, Labrador Technologies Inc. has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
It appears that Labrador Technologies Inc. remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Ron Sterne deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying Labrador Technologies shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.