How Should Investors Feel About True Leaf Brands Inc.'s (CNSX:MJ) CEO Pay?

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Darcy Bomford has been the CEO of True Leaf Brands Inc. (CNSX:MJ) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for True Leaf Brands

How Does Darcy Bomford's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that True Leaf Brands Inc. has a market cap of CA$42m, and is paying total annual CEO compensation of CA$222k. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$70k. We examined a group of similar sized companies, with market capitalizations of below CA$264m. The median CEO total compensation in that group is CA$152k.

As you can see, Darcy Bomford is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean True Leaf Brands Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at True Leaf Brands has changed over time.

Is True Leaf Brands Inc. Growing?

True Leaf Brands Inc. has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 89% over the last year.

Investors should note that, over three years, earnings per share are down. 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. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has True Leaf Brands Inc. Been A Good Investment?

True Leaf Brands Inc. has served shareholders reasonably well, with a total return of 27% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We examined the amount True Leaf Brands Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Shareholders may want to check for free if True Leaf Brands insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.