Mike Pyle has been the CEO of Exchange Income Corporation (TSE:EIF) since 2006, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also assess whether Exchange Income pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Mike Pyle Compare With Other Companies In The Industry?
At the time of writing, our data shows that Exchange Income Corporation has a market capitalization of CA$1.1b, and reported total annual CEO compensation of CA$2.2m for the year to December 2019. That’s mostly flat as compared to the prior year’s compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$746k.
On examining similar-sized companies in the industry with market capitalizations between CA$524m and CA$2.1b, we discovered that the median CEO total compensation of that group was CA$1.7m. This suggests that Exchange Income remunerates its CEO largely in line with the industry average. Moreover, Mike Pyle also holds CA$586k worth of Exchange Income stock directly under their own name.
Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Exchange Income pays out 34% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Exchange Income Corporation’s Growth
Over the last three years, Exchange Income Corporation has shrunk its earnings per share by 12% per year. Its revenue is up 1.7% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn’t enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has Exchange Income Corporation Been A Good Investment?
With a total shareholder return of 21% over three years, Exchange Income Corporation shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, Mike is compensated close to the median for companies of its size, and which belong to the same industry. Exchange Income has had a poor showing when it comes to EPS growth, and it’s tough…
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