TSXV:ITG Past Future Earnings Feb 27th 18
What’s a reasonable CEO compensation?
Though no standard benchmark exists, since compensation should account for specific factors of the company and market, we can estimate a high-level benchmark to see if ITG is an outlier. This outcome helps investors ask the right question about Jackson’s incentive alignment. On average, a Canadian small-cap has a value of $345M, generates earnings of $24M, and pays its CEO circa $770,000 per year. Usually I’d use market cap and profit as factors determining performance, however, ITG’s negative earnings reduces the effectiveness of this method. Looking at the range of compensation for small-cap executives, it seems like Jackson is remunerated sensibly relative to peers. Overall, though ITG is unprofitable, it seems like the CEO’s pay is sound.
Next Steps:
In order to determine whether or not you should invest in ITG, your thesis should be built on fundamentals. Even though CEO pay isn’t technically a key concern, it could serve as an indication as to how board members align incentives and how they think about setting policies. These issues directly impacts how ITG makes money, and factors impacting your return on investment. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:
- Governance: To find out more about ITG’s governance, look through our infographic report of the company’s board and management.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ITG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.