Linda Hasenfratz became the CEO of Linamar Corporation (TSE:LNR) in 2002. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Linda Hasenfratz’s Compensation Compare With Similar Sized Companies?
Our data indicates that Linamar Corporation is worth CA$3.2b, and total annual CEO compensation was reported as CA$15m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$643k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from CA$2.6b to CA$8.4b, and the median CEO total compensation was CA$3.8m.
It would therefore appear that Linamar Corporation pays Linda Hasenfratz more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Linamar has changed from year to year.
Is Linamar Corporation Growing?
Linamar Corporation has increased its earnings per share (EPS) by an average of 1.7% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
I’m not particularly impressed by the revenue growth, but I’m happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Linamar Corporation Been A Good Investment?
Given the total loss of 13% over three years, many shareholders in Linamar Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Linamar Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Linamar shares with their own money (free access).
If you want to buy a stock that is better than Linamar, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.