Andrew Malion is the CEO of Spectra Products Inc. (CVE:SSA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Andrew Malion's Compensation Compare With Similar Sized Companies?
According to our data, Spectra Products Inc. has a market capitalization of CA$3.1m, and paid its CEO total annual compensation worth CA$100k over the year to December 2018. Notably, the salary of CA$100k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below CA$278m. The median CEO total compensation in that group is CA$217k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Spectra Products stands. On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. At the company level, Spectra Products pays Andrew Malion solely through a salary, preferring to go down a conventional route.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. 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 Spectra Products, below.
Is Spectra Products Inc. Growing?
Spectra Products Inc. has seen earnings per share (EPS) move positively by an average of 62% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 5.3%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Spectra Products Inc. Been A Good Investment?
Boasting a total shareholder return of 300% over three years, Spectra Products Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Spectra Products Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Andrew Malion deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Spectra Products (3 shouldn't be ignored!) that you should be aware of before investing here.
Important note: Spectra Products 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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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.