Yahoo Finance Is Empire Industries Ltd.'s (CVE:EIL) CEO Salary Justified?
Kenneth Nelson became the CEO of Empire Industries Ltd. (CVE:EIL) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Empire Industries
How Does Kenneth Nelson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Empire Industries Ltd. has a market cap of CA$40m, and reported total annual CEO compensation of CA$374k for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$355k. We took a group of companies with market capitalizations below CA$264m, and calculated the median CEO total compensation to be CA$180k.
Thus we can conclude that Kenneth Nelson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Empire Industries Ltd.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Empire Industries has changed over time.
Is Empire Industries Ltd. Growing?
Over the last three years Empire Industries Ltd. has shrunk its earnings per share by an average of 108% per year (measured with a line of best fit). Its revenue is up 6.7% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Empire Industries Ltd. Been A Good Investment?
Empire Industries Ltd. has generated a total shareholder return of 1.3% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We compared the total CEO remuneration paid by Empire Industries Ltd., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Empire Industries shares (free trial).
Important note: Empire Industries 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.
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.
If you spot an error that warrants correction, please contact the editor at 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
