TSXV:GQ Income Statement Feb 21st 18
More Is GQ overpaying the CEO? Though one size does not fit all, as compensation should be tailored to the specific company and market, we can gauge a high-level thresold to see if GQ deviates substantially from its peers. This exercise can help direct shareholders to ask the right question about Richardson’s incentive alignment. On average, a Canadian small-cap is worth around $345M, generates earnings of $24M, and remunerates its CEO at roughly $770,000 per annum. Normally I would look at market cap and earnings as a proxy for performance, however, GQ’s negative earnings reduces the usefulness of my formula. Looking at the range of compensation for small-cap executives, it seems like Richardson is being paid within the bounds of reasonableness. Putting everything together, even though GQ is loss-making, it seems like the CEO’s pay is reflective of the appropriate level.
Next Steps: You can breathe easy knowing that shareholder funds aren’t being used to overpay GQ’s CEO. However, on the flipside, you should ask whether Richardson is appropriately remunerated on the basis of retention. Its important for shareholders to be active in voting governance decisions, as board members are only representatives of investors’ voices. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:
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.