Is Richelieu Hardware Ltd.'s (TSE:RCH) CEO Paid At A Competitive Rate?

By
Simply Wall St
Published
July 29, 2019
TSX:RCH
Source: Shutterstock

Richard Lord became the CEO of Richelieu Hardware Ltd. (TSE:RCH) in 1988. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Richelieu Hardware

How Does Richard Lord's Compensation Compare With Similar Sized Companies?

Our data indicates that Richelieu Hardware Ltd. is worth CA$1.5b, and total annual CEO compensation is CA$2.0m. (This number is for the twelve months until November 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$683k. We examined companies with market caps from CA$527m to CA$2.1b, and discovered that the median CEO total compensation of that group was CA$2.0m.

That means Richard Lord receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Richelieu Hardware has changed over time.

TSX:RCH CEO Compensation, July 30th 2019
TSX:RCH CEO Compensation, July 30th 2019

Is Richelieu Hardware Ltd. Growing?

On average over the last three years, Richelieu Hardware Ltd. has grown earnings per share (EPS) by 3.8% each year (using a line of best fit). Its revenue is up 3.9% over last year.

I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing.

Has Richelieu Hardware Ltd. Been A Good Investment?

With a total shareholder return of 0.1% over three years, Richelieu Hardware Ltd. has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Remuneration for Richard Lord is close enough to the median pay for a CEO of a similar sized company .

We think many would like to see better growth. While the CEO may not be underpaid, we don't think the pay is too generous either. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Richelieu Hardware (free visualization of insider trades).

If you want to buy a stock that is better than Richelieu Hardware, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.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.

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