Does Shaw Communications' (TSE:SJR.B) CEO Salary Compare Well With Industry Peers?

Brad Shaw has been the CEO of Shaw Communications Inc. (TSE:SJR.B) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Shaw Communications

How Does Total Compensation For Brad Shaw Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shaw Communications Inc. has a market capitalization of CA$13b, and reported total annual CEO compensation of CA$12m for the year to August 2019. Notably, that's an increase of 58% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$2.0m.

For comparison, other companies in the industry with market capitalizations above CA$11b, reported a median total CEO compensation of CA$17m. From this we gather that Brad Shaw is paid around the median for CEOs in the industry. Furthermore, Brad Shaw directly owns CA$181m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. Shaw Communications pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Shaw Communications Inc.'s Growth Numbers

Over the past three years, Shaw Communications Inc. has seen its earnings per share (EPS) grow by 4.3% per year. In the last year, its revenue is up 1.7%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Shaw Communications Inc. Been A Good Investment?

Shaw Communications Inc. has not done too badly by shareholders, with a total return of 2.3%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Shaw Communications Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has failed to produce substantial growth in either EPS or total shareholder return. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Shaw Communications that you should be aware of before investing.

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. 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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