Yahoo Finance Why Engagement Labs' (CVE:EL) CEO Pay Matters
Ed Keller has been the CEO of Engagement Labs Inc. (CVE:EL) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Engagement Labs.
See our latest analysis for Engagement Labs
How Does Total Compensation For Ed Keller Compare With Other Companies In The Industry?
According to our data, Engagement Labs Inc. has a market capitalization of CA$4.7m, and paid its CEO total annual compensation worth CA$690k over the year to December 2019. That's a fairly small increase of 6.4% over the previous year. We note that the salary portion, which stands at CA$364.9k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below CA$256m, reported a median total CEO compensation of CA$224k. Accordingly, our analysis reveals that Engagement Labs Inc. pays Ed Keller north of the industry median. Furthermore, Ed Keller directly owns CA$112k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$365k | CA$458k | 53% |
Other | CA$326k | CA$190k | 47% |
Total Compensation | CA$690k | CA$649k | 100% |
Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. Engagement Labs pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Engagement Labs Inc.'s Growth Numbers
Over the past three years, Engagement Labs Inc. has seen its earnings per share (EPS) grow by 57% per year. It saw its revenue drop 19% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Engagement Labs Inc. Been A Good Investment?
With a three year total loss of 90% for the shareholders, Engagement Labs Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Ed is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Ed is underpaid, in fact compensation is definitely on the higher side.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Engagement Labs (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Engagement Labs 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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