Yahoo Finance Is Memex Inc.'s (CVE:OEE) CEO Pay Justified?
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Dave McPhail became the CEO of Memex Inc. (CVE:OEE) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
Check out our latest analysis for Memex
How Does Dave McPhail's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Memex Inc. has a market cap of CA$5.4m, and is paying total annual CEO compensation of CA$199k. (This number is for the twelve months until September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$185k. We looked at a group of companies with market capitalizations under CA$265m, and the median CEO total compensation was CA$150k.
It would therefore appear that Memex Inc. pays Dave McPhail more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Memex, below.
Is Memex Inc. Growing?
On average over the last three years, Memex Inc. has grown earnings per share (EPS) by 22% each year (using a line of best fit). In the last year, its revenue is up 37%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Memex Inc. Been A Good Investment?
Since shareholders would have lost about 70% over three years, some Memex Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Memex Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Shareholders may want to check for free if Memex insiders are buying or selling shares.
Important note: Memex may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.