In 2015 Barry Perry was appointed CEO of Fortis Inc. (TSE:FTS). First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Barry Perry’s Compensation Compare With Similar Sized Companies?
According to our data, Fortis Inc. has a market capitalization of CA$27b, and paid its CEO total annual compensation worth CA$9.1m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$9.0m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
So Barry Perry is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Fortis has changed from year to year.
Is Fortis Inc. Growing?
On average over the last three years, Fortis Inc. has grown earnings per share (EPS) by 21% each year (using a line of best fit). Its revenue is up 4.7% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Fortis Inc. Been A Good Investment?
Most shareholders would probably be pleased with Fortis Inc. for providing a total return of 54% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Barry Perry is paid around the same as most CEOs of large companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Fortis (free visualization of insider trades).
Important note: Fortis 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 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.
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