In 2014 Randy MacEwen was appointed CEO of Ballard Power Systems Inc. (TSE:BLDP). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Randy MacEwen’s Compensation Compare With Similar Sized Companies?
According to our data, Ballard Power Systems Inc. has a market capitalization of CA$3.5b, and paid its CEO total annual compensation worth US$2.0m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$573k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from CA$2.7b to CA$8.5b, we found the median CEO total compensation was CA$3.8m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Ballard Power Systems, below.
Is Ballard Power Systems Inc. Growing?
On average over the last three years, Ballard Power Systems Inc. has shrunk earnings per share by 26% each year (measured with a line of best fit). It saw its revenue drop 14% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ballard Power Systems Inc. Been A Good Investment?
Boasting a total shareholder return of 455% over three years, Ballard Power Systems Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It appears that Ballard Power Systems Inc. remunerates its CEO below most similar sized companies.
It’s well worth noting that while Randy MacEwen is paid less than most company leaders (at similar sized companies), there isn’t much EPS growth. Having said that, returns to shareholders have been great. We would like to see EPS growth, but in our view it seems the CEO is remunerated reasonably. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ballard Power Systems.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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