The performance at CardioComm Solutions, Inc. (CVE:EKG) has been rather lacklustre of late and shareholders may be wondering what CEO Etienne Grima is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 20 December 2022. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for CardioComm Solutions

Comparing CardioComm Solutions, Inc.’s CEO Compensation With The Industry

At the time of writing, our data shows that CardioComm Solutions, Inc. has a market capitalization of CA$2.3m, and reported total annual CEO compensation of CA$103k for the year to December 2021. We note that’s a decrease of 46% compared to last year. In particular, the salary of CA$88.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$271m, reported a median total CEO compensation of CA$246k. This suggests that Etienne Grima is paid below the industry median. Furthermore, Etienne Grima directly owns CA$164k worth of shares in the company.

Component 2021 2020 Proportion (2021)
Salary CA$89k CA$180k 86%
Other CA$14k CA$10k 14%
Total Compensation CA$103k CA$190k 100%

On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. CardioComm Solutions is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

TSXV:EKG CEO Compensation December 14th 2022

A Look at CardioComm Solutions, Inc.’s Growth Numbers

CardioComm Solutions, Inc.’s earnings per share (EPS) grew 107% per year over the last three years. In the last year, its revenue is up 50%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 CardioComm Solutions, Inc. Been A Good Investment?

With a total shareholder return of -57% over three years, CardioComm Solutions, Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary…

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 3 which are significant) in CardioComm Solutions we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Valuation is complex, but we’re helping make it simple.

Find out whether CardioComm Solutions is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.


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