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Is Mundoro Capital Inc.'s (CVE:MUN) CEO Salary Justified?

Teo Dechev became the CEO of Mundoro Capital Inc. (CVE:MUN) in 2009. 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.

See our latest analysis for Mundoro Capital

How Does Teo Dechev's Compensation Compare With Similar Sized Companies?

Our data indicates that Mundoro Capital Inc. is worth CA$11m, and total annual CEO compensation was reported as CA$255k for the year to December 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at CA$225k. We took a group of companies with market capitalizations below CA$276m, and calculated the median CEO total compensation to be CA$215k.

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Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Mundoro Capital stands. Talking in terms of the sector, salary represented approximately 91% of total compensation out of all the companies we analysed, while other remuneration made up 9.1% of the pie. Mundoro Capital does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.

So Teo Dechev is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Mundoro Capital has changed over time.

TSXV:MUN CEO Compensation May 27th 2020
TSXV:MUN CEO Compensation May 27th 2020

Is Mundoro Capital Inc. Growing?

Over the last three years Mundoro Capital Inc. has seen earnings per share (EPS) move in a positive direction by an average of 28% per year (using a line of best fit). In the last year, its revenue is down 51%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mundoro Capital Inc. Been A Good Investment?

Given the total loss of 53% over three years, many shareholders in Mundoro Capital Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Teo Dechev is close enough to the median pay for a CEO of a similar sized company .

We think that the EPS growth is very pleasing, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. On another note, Mundoro Capital has 4 warning signs (and 2 which are potentially serious) we think you should know about.

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.