Is Global Daily Fantasy Sports Inc. (CVE:DFS) Overpaying Its CEO?

Darcy Krogh has been the CEO of Global Daily Fantasy Sports Inc. (CVE:DFS) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Global Daily Fantasy Sports

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

According to our data, Global Daily Fantasy Sports Inc. has a market capitalization of CA$9.7m, and paid its CEO total annual compensation worth CA$120k over the year to December 2018. Notably, the salary of CA$120k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below CA$263m, and calculated the median CEO total compensation to be CA$160k.

So Darcy Krogh is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Global Daily Fantasy Sports has changed over time.

TSXV:DFS CEO Compensation, October 18th 2019
TSXV:DFS CEO Compensation, October 18th 2019

Is Global Daily Fantasy Sports Inc. Growing?

Over the last three years Global Daily Fantasy Sports Inc. has shrunk its earnings per share by an average of 66% per year (measured with a line of best fit). In the last year, its revenue is up 17%.

Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Global Daily Fantasy Sports Inc. Been A Good Investment?

Since shareholders would have lost about 84% over three years, some Global Daily Fantasy Sports Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Darcy Krogh is paid around what is normal the leaders of comparable size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Global Daily Fantasy Sports.

If you want to buy a stock that is better than Global Daily Fantasy Sports, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.com. 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.

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