Why Morneau Shepell Inc.'s (TSE:MSI) CEO Pay Matters To You
Stephen Liptrap became the CEO of Morneau Shepell Inc. (TSE:MSI) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
View our latest analysis for Morneau Shepell
How Does Stephen Liptrap's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Morneau Shepell Inc. has a market cap of CA$2.4b, and reported total annual CEO compensation of CA$2.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$556k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from CA$1.3b to CA$4.2b, and discovered that the median CEO total compensation of that group was CA$2.8m.
So Stephen Liptrap receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Morneau Shepell has changed from year to year.
Is Morneau Shepell Inc. Growing?
Morneau Shepell Inc. has reduced its earnings per share by an average of 22% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 24%.
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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Morneau Shepell Inc. Been A Good Investment?
I think that the total shareholder return of 98%, over three years, would leave most Morneau Shepell Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Remuneration for Stephen Liptrap is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Shareholders may want to check for free if Morneau Shepell insiders are buying or selling shares.
Important note: Morneau Shepell may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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. Thank you for reading.
