Yahoo Finance This Is Why Thinkific Labs Inc.'s (TSE:THNC) CEO Compensation Looks Appropriate
Key Insights
Thinkific Labs will host its Annual General Meeting on 20th of June
Total pay for CEO Greg Smith includes US$258.0k salary
The total compensation is 64% less than the average for the industry
Over the past three years, Thinkific Labs' EPS grew by 9.7% and over the past three years, the total loss to shareholders 79%
Performance at Thinkific Labs Inc. (TSE:THNC) has been rather uninspiring recently and shareholders may be wondering how CEO Greg Smith plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 20th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.
Check out our latest analysis for Thinkific Labs
How Does Total Compensation For Greg Smith Compare With Other Companies In The Industry?
At the time of writing, our data shows that Thinkific Labs Inc. has a market capitalization of CA$291m, and reported total annual CEO compensation of US$335k for the year to December 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of US$258.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Canadian Software industry with market capitalizations ranging between CA$137m and CA$549m had a median total CEO compensation of US$921k. Accordingly, Thinkific Labs pays its CEO under the industry median. Furthermore, Greg Smith directly owns CA$93m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$258k | US$302k | 77% |
Other | US$77k | US$33k | 23% |
Total Compensation | US$335k | US$336k | 100% |
On an industry level, roughly 75% of total compensation represents salary and 25% is other remuneration. Although there is a difference in how total compensation is set, Thinkific Labs more or less reflects the market in terms of setting the 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.
A Look at Thinkific Labs Inc.'s Growth Numbers
Thinkific Labs Inc.'s earnings per share (EPS) grew 9.7% per year over the last three years. It achieved revenue growth of 13% over the last year.
We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Thinkific Labs Inc. Been A Good Investment?
Few Thinkific Labs Inc. shareholders would feel satisfied with the return of -79% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The fact that shareholders are sitting on a loss is certainly disheartening. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Thinkific Labs that investors should be aware of in a dynamic business environment.
Switching gears from Thinkific Labs, 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.
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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.
