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Some Shareholders May find It Hard To Increase Legend Power Systems Inc.'s (CVE:LPS) CEO Compensation This Year

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Under the guidance of CEO Randy Buchamer, Legend Power Systems Inc. (CVE:LPS) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 10 September 2021. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Legend Power Systems

How Does Total Compensation For Randy Buchamer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Legend Power Systems Inc. has a market capitalization of CA$63m, and reported total annual CEO compensation of CA$238k for the year to September 2020. That is, the compensation was roughly the same as last year. Notably, the salary of CA$238k is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below CA$250m, we found that the median total CEO compensation was CA$238k. So it looks like Legend Power Systems compensates Randy Buchamer in line with the median for the industry. What's more, Randy Buchamer holds CA$1.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

CA$238k

CA$244k

100%

Other

-

-

-

Total Compensation

CA$238k

CA$244k

100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. Speaking on a company level, Legend Power Systems prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

ceo-compensation
ceo-compensation

Legend Power Systems Inc.'s Growth

Over the last three years, Legend Power Systems Inc. has shrunk its earnings per share by 9.6% per year. It achieved revenue growth of 32% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Legend Power Systems Inc. Been A Good Investment?

With a total shareholder return of 1.9% over three years, Legend Power Systems Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Legend Power Systems pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Legend Power Systems (1 is concerning!) that you should be aware of before investing here.

Switching gears from Legend Power Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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