Pat D’Eramo became the CEO of Martinrea International Inc. (TSE:MRE) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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.
How Does Pat D’Eramo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Martinrea International Inc. has a market cap of CA$1.1b, and is paying total annual CEO compensation of CA$3.8m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at CA$818k. When we examined a selection of companies with market caps ranging from CA$527m to CA$2.1b, we found the median CEO compensation was CA$2.0m.
Thus we can conclude that Pat D’Eramo receives more in total compensation than the median of a group of companies in the same market, and of similar size to Martinrea International Inc.. However, this doesn’t necessarily mean the pay 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 Martinrea International has changed from year to year.
Is Martinrea International Inc. Growing?
On average over the last three years, Martinrea International Inc. has grown earnings per share (EPS) by 27% each year (using a line of best fit). In the last year, its revenue is down -4.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Martinrea International Inc. Been A Good Investment?
Boasting a total shareholder return of 47% over three years, Martinrea International Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Martinrea International Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Martinrea International.
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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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.