Yahoo Finance How Is NexgenRx's (CVE:NXG) CEO Paid Relative To Peers?
This article will reflect on the compensation paid to Ron Loucks who has served as CEO of NexgenRx Inc. (CVE:NXG) since 2003. This analysis will also assess whether NexgenRx pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for NexgenRx
Comparing NexgenRx Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that NexgenRx Inc. has a market capitalization of CA$13m, and reported total annual CEO compensation of CA$181k for the year to December 2019. This means that the compensation hasn't changed much from last year. In particular, the salary of CA$165.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below CA$264m, we found that the median total CEO compensation was CA$570k. That is to say, Ron Loucks is paid under the industry median. Moreover, Ron Loucks also holds CA$1.4m worth of NexgenRx stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$165k | CA$165k | 91% |
Other | CA$16k | CA$16k | 9% |
Total Compensation | CA$181k | CA$181k | 100% |
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. It's interesting to note that NexgenRx pays out a greater portion of remuneration through salary, compared to the industry. 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 NexgenRx Inc.'s Growth Numbers
Over the past three years, NexgenRx Inc. has seen its earnings per share (EPS) grow by 4.4% per year. In the last year, its revenue is up 13%.
This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has NexgenRx Inc. Been A Good Investment?
With a three year total loss of 19% for the shareholders, NexgenRx Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As previously discussed, Ron is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company isn't growing and total shareholder returns have been disappointing. So while we would not say that Ron is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for NexgenRx (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Important note: NexgenRx 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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