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In 2014 Bharat Masrani was appointed CEO of The Toronto-Dominion Bank (TSE:TD). First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Bharat Masrani’s Compensation Compare With Similar Sized Companies?
According to our data, The Toronto-Dominion Bank has a market capitalization of CA$135b, and pays its CEO total annual compensation worth CA$15m. (This figure is for the year to October 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$1.3m. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$8.8m. (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).
As you can see, Bharat Masrani is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean The Toronto-Dominion Bank is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Toronto-Dominion Bank, below.
Is The Toronto-Dominion Bank Growing?
The Toronto-Dominion Bank has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). Its revenue is up 6.9% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Toronto-Dominion Bank Been A Good Investment?
Most shareholders would probably be pleased with The Toronto-Dominion Bank for providing a total return of 44% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by The Toronto-Dominion Bank, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Toronto-Dominion Bank shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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.