Does Element Lifestyle Retirement Inc.'s (CVE:ELM) CEO Pay Compare Well With Peers? - Yahoo Finance

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In 2013 Michael Diao was appointed CEO of Element Lifestyle Retirement Inc. (CVE:ELM). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Element Lifestyle Retirement

How Does Michael Diao's Compensation Compare With Similar Sized Companies?

Our data indicates that Element Lifestyle Retirement Inc. is worth CA$7.8m, and total annual CEO compensation is CA$185k. (This number is for the twelve months until May 2018). While we always look at total compensation first, we note that the salary component is less, at CA$170k. We looked at a group of companies with market capitalizations under CA$261m, and the median CEO total compensation was CA$120k.

It would therefore appear that Element Lifestyle Retirement Inc. pays Michael Diao more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Element Lifestyle Retirement has changed from year to year.

TSXV:ELM CEO Compensation, July 5th 2019

Is Element Lifestyle Retirement Inc. Growing?

Over the last three years Element Lifestyle Retirement Inc. has grown its earnings per share (EPS) by an average of 50% per year (using a line of best fit). It saw its revenue drop -21% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Element Lifestyle Retirement Inc. Been A Good Investment?

Since shareholders would have lost about 58% over three years, some Element Lifestyle Retirement Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Element Lifestyle Retirement Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong 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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Element Lifestyle Retirement.

If you want to buy a stock that is better than Element Lifestyle Retirement, this free list of high return, low debt companies is a great place to look.

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.

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https://finance.yahoo.com/news/does-element-lifestyle-retirement-inc-121137490.html

2019-07-05 12:11:00Z
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