Key Insights
DMG Blockchain Solutions Inc. (CVE:DMGI) has not performed well recently and CEO Sheldon Bennett will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 15th of March. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for DMG Blockchain Solutions
How Does Total Compensation For Sheldon Bennett Compare With Other Companies In The Industry?
Our data indicates that DMG Blockchain Solutions Inc. has a market capitalization of CA$98m, and total annual CEO compensation was reported as CA$779k for the year to September 2023. That’s a notable increase of 67% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$339k.
On comparing similar-sized companies in the Canadian Software industry with market capitalizations below CA$270m, we found that the median total CEO compensation was CA$347k. Hence, we can conclude that Sheldon Bennett is remunerated higher than the industry median. What’s more, Sheldon Bennett holds CA$2.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
|
Component |
2023 |
2022 |
Proportion (2023) |
|
Salary |
CA$339k |
CA$299k |
43% |
|
Other |
CA$440k |
CA$168k |
57% |
|
Total Compensation |
CA$779k |
CA$467k |
100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. DMG Blockchain Solutions pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at DMG Blockchain Solutions Inc.’s Growth Numbers
Over the last three years, DMG Blockchain Solutions Inc. has shrunk its earnings per share by 39% per year. It saw its revenue drop 16% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has DMG Blockchain Solutions Inc. Been A Good Investment?
Few DMG Blockchain Solutions Inc. shareholders would feel satisfied with the return of -77% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
Not only have shareholders not seen a favorable return on their investment, but the business hasn’t performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company’s key performance areas. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in DMG Blockchain Solutions 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.
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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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