In 2016, Ed Keller was appointed CEO of Engagement Labs Inc. (CVE:EL). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ed Keller's Compensation Compare With Similar Sized Companies?
According to our data, Engagement Labs Inc. has a market capitalization of CA$4.7m, and paid its CEO total annual compensation worth CA$649k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$458k. We looked at a group of companies with market capitalizations under CA$282m, and the median CEO total compensation was CA$220k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Engagement Labs stands. Talking in terms of the sector, salary represented approximately 81% of total compensation out of all the companies we analysed, while other remuneration made up 19% of the pie. So it seems like there isn't a significant difference between Engagement Labs and the broader market, in terms of salary allocation in the overall compensation package.
As you can see, Ed Keller is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Engagement Labs Inc. is paying too much. 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 Engagement Labs, below.
Is Engagement Labs Inc. Growing?
Over the last three years Engagement Labs Inc. has seen earnings per share (EPS) move in a positive direction by an average of 69% per year (using a line of best fit). Its revenue is up 6.0% over last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Engagement Labs Inc. Been A Good Investment?
Since shareholders would have lost about 83% over three years, some Engagement Labs Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Engagement Labs Inc. with the amount paid at companies with a similar market capitalization. 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. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. On another note, Engagement Labs has 5 warning signs (and 3 which shouldn't be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.