Stephen McCoach has been the CEO of Imperial Ginseng Products Ltd. (CVE:IGP) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Imperial Ginseng Products pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Imperial Ginseng Products
How Does Total Compensation For Stephen McCoach Compare With Other Companies In The Industry?
According to our data, Imperial Ginseng Products Ltd. has a market capitalization of CA$1.8m, and paid its CEO total annual compensation worth CA$362k over the year to June 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is CA$332.7k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under CA$266m, the reported median total CEO compensation was CA$306k. From this we gather that Stephen McCoach is paid around the median for CEOs in the industry. Moreover, Stephen McCoach also holds CA$564k worth of Imperial Ginseng Products stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$333k | CA$333k | 92% |
Other | CA$29k | CA$26k | 8% |
Total Compensation | CA$362k | CA$359k | 100% |
Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Imperial Ginseng Products pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Imperial Ginseng Products Ltd.'s Growth Numbers
Over the last three years, Imperial Ginseng Products Ltd. has shrunk its earnings per share by 108% per year. It saw its revenue drop 26% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Imperial Ginseng Products Ltd. Been A Good Investment?
Since shareholders would have lost about 83% over three years, some Imperial Ginseng Products Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Imperial Ginseng Products pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Imperial Ginseng Products you should be aware of, and 3 of them are potentially serious.
Important note: Imperial Ginseng Products 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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