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Shareholders may be wondering what CEO Darold Parken plans to do to improve the less than great performance at DeepMarkit Corp. (CVE:MKT) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29 October 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Comparing DeepMarkit Corp.'s CEO Compensation With the industry
Our data indicates that DeepMarkit Corp. has a market capitalization of CA$4.3m, and total annual CEO compensation was reported as CA$100k for the year to December 2020. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$100k.
On comparing similar-sized companies in the industry with market capitalizations below CA$247m, we found that the median total CEO compensation was CA$156k. That is to say, Darold Parken is paid under the industry median. What's more, Darold Parken holds CA$139k worth of shares in the company in their own name.
On an industry level, roughly 77% of total compensation represents salary and 23% is other remuneration. On a company level, DeepMarkit prefers to reward its CEO through a salary, opting not to pay Darold Parken through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
DeepMarkit Corp.'s Growth
DeepMarkit Corp.'s earnings per share (EPS) grew 75% per year over the last three years. It saw its revenue drop 44% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has DeepMarkit Corp. Been A Good Investment?
With a total shareholder return of -52% over three years, DeepMarkit Corp. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
DeepMarkit rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 6 warning signs for DeepMarkit that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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