Shareholders Will Probably Not Have Any Issues With CIBT Education Group Inc.'s (TSE:MBA) CEO Compensation

Simply Wall St
·3 min read

The performance at CIBT Education Group Inc. (TSE:MBA) has been rather lacklustre of late and shareholders may be wondering what CEO Toby Chu is planning to do about this. At the next AGM coming up on 10 February 2023, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for CIBT Education Group

How Does Total Compensation For Toby Chu Compare With Other Companies In The Industry?

According to our data, CIBT Education Group Inc. has a market capitalization of CA$33m, and paid its CEO total annual compensation worth CA$336k over the year to August 2022. We note that's a decrease of 21% compared to last year. In particular, the salary of CA$296.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Canada Consumer Services industry with market capitalizations below CA$268m, reported a median total CEO compensation of CA$737k. Accordingly, CIBT Education Group pays its CEO under the industry median. What's more, Toby Chu holds CA$4.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2022

2021

Proportion (2022)

Salary

CA$296k

CA$264k

88%

Other

CA$40k

CA$159k

12%

Total Compensation

CA$336k

CA$423k

100%

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. There isn't a significant difference between CIBT Education Group and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at CIBT Education Group Inc.'s Growth Numbers

CIBT Education Group Inc. has reduced its earnings per share by 106% a year over the last three years. Its revenue is up 17% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. 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 could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has CIBT Education Group Inc. Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in CIBT Education Group Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. The fact that earnings growth has gone backwards could be a factor for the downward trend in the share price. 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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are significant) in CIBT Education Group we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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