Amar Doman has been the CEO of CanWel Building Materials Group Ltd. (TSE:CWX) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether CanWel Building Materials Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Amar Doman Compare With Other Companies In The Industry?
At the time of writing, our data shows that CanWel Building Materials Group Ltd. has a market capitalization of CA$516m, and reported total annual CEO compensation of CA$902k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at CA$600.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from CA$263m to CA$1.1b, the reported median CEO total compensation was CA$1.5m. That is to say, Amar Doman is paid under the industry median. Moreover, Amar Doman also holds CA$854k worth of CanWel Building Materials Group stock directly under their own name.
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. CanWel Building Materials Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at CanWel Building Materials Group Ltd.'s Growth Numbers
CanWel Building Materials Group Ltd. has reduced its earnings per share by 8.1% a year over the last three years. It achieved revenue growth of 9.7% over the last year.
Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 CanWel Building Materials Group Ltd. Been A Good Investment?
We think that the total shareholder return of 40%, over three years, would leave most CanWel Building Materials Group Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, CanWel Building Materials Group Ltd. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And while EPS growth is in the red, shareholder returns have been great over the last three years, so that's certainly a bright spot! Although we'd like to see positive EPS growth, we'd argue the remuneration is modest, based on our observations.
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 identified 2 warning signs for CanWel Building Materials Group (1 shouldn't be ignored!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.