Does DIAGNOS Inc.'s (CVE:ADK) CEO Pay Matter?
In 2004 André Larente was appointed CEO of DIAGNOS Inc. (CVE:ADK). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for DIAGNOS
How Does André Larente's Compensation Compare With Similar Sized Companies?
Our data indicates that DIAGNOS Inc. is worth CA$13m, and total annual CEO compensation was reported as CA$272k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at CA$206k. We took a group of companies with market capitalizations below CA$283m, and calculated the median CEO total compensation to be CA$224k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where DIAGNOS stands. On an industry level, roughly 94% of total compensation represents salary and 5.7% is other remuneration. Our data reveals that DIAGNOS allocates salary in line with the wider market.
That means André Larente receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at DIAGNOS has changed over time.
Is DIAGNOS Inc. Growing?
DIAGNOS Inc. has seen earnings per share (EPS) move positively by an average of 19% a year, over the last three years (using a line of best fit). Its revenue is up 14% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has DIAGNOS Inc. Been A Good Investment?
With a three year total loss of 82%, DIAGNOS Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
André Larente is paid around what is normal for the leaders of comparable size companies.
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. CEO compensation is an important area to keep your eyes on, but we've also identified 7 warning signs for DIAGNOS (5 are a bit unpleasant!) that you should be aware of before investing here.
Important note: DIAGNOS may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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. Thank you for reading.
