Stephen Liptrap became the CEO of Morneau Shepell Inc. (TSE:MSI) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Morneau Shepell pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Morneau Shepell
How Does Total Compensation For Stephen Liptrap Compare With Other Companies In The Industry?
At the time of writing, our data shows that Morneau Shepell Inc. has a market capitalization of CA$1.9b, and reported total annual CEO compensation of CA$2.6m for the year to December 2019. That's a notable increase of 18% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$613k.
On comparing similar companies from the same industry with market caps ranging from CA$1.3b to CA$4.3b, we found that the median CEO total compensation was CA$5.6m. This suggests that Stephen Liptrap is paid below the industry median. What's more, Stephen Liptrap holds CA$491k worth of shares in the company in their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CA$613k | CA$556k | 23% |
| Other | CA$2.0m | CA$1.7m | 77% |
| Total Compensation | CA$2.6m | CA$2.2m | 100% |
On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. In Morneau Shepell's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Morneau Shepell Inc.'s Growth Numbers
Over the past three years, Morneau Shepell Inc. has seen its earnings per share (EPS) grow by 9.8% per year. It achieved revenue growth of 20% over the last year.
We think the revenue growth is good. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Morneau Shepell Inc. Been A Good Investment?
Boasting a total shareholder return of 47% over three years, Morneau Shepell Inc. has done well by shareholders. 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.
In Summary...
As we noted earlier, Morneau Shepell pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. Considering this fine result for investors, we believe CEO compensation to be apt.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Morneau Shepell (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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.
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