Is Quest PharmaTech Inc.'s (CVE:QPT) CEO Overpaid Relative To Its Peers?
In 2006 Madi Madiyalakan was appointed CEO of Quest PharmaTech Inc. (CVE:QPT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
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Check out our latest analysis for Quest PharmaTech
How Does Madi Madiyalakan's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Quest PharmaTech Inc. has a market cap of CA$21m, and is paying total annual CEO compensation of CA$127k. (This number is for the twelve months until January 2018). While we always look at total compensation first, we note that the salary component is less, at CA$26k. We took a group of companies with market capitalizations below CA$268m, and calculated the median CEO total compensation to be CA$149k.
So Madi Madiyalakan is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Quest PharmaTech, below.
Is Quest PharmaTech Inc. Growing?
Earnings per share at Quest PharmaTech Inc. are much the same as they were three years ago, albeit slightly lower, based on the trend. It achieved revenue growth of 1413% over the last year.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Quest PharmaTech Inc. Been A Good Investment?
Boasting a total shareholder return of 127% over three years, Quest PharmaTech Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Madi Madiyalakan is paid around the same as most CEOs of similar size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Quest PharmaTech shares (free trial).
Important note: Quest PharmaTech 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.
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.
