Shareholders Would Not Be Objecting To Morneau Shepell Inc.'s (TSE:MSI) CEO Compensation And Here's Why

It would be hard to discount the role that CEO Stephen Liptrap has played in delivering the impressive results at Morneau Shepell Inc. (TSE:MSI) recently. Coming up to the next AGM on 14 May 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Morneau Shepell

Comparing Morneau Shepell Inc.'s CEO Compensation With the industry

According to our data, Morneau Shepell Inc. has a market capitalization of CA$2.2b, and paid its CEO total annual compensation worth CA$3.2m over the year to December 2020. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$644k.

On comparing similar companies from the same industry with market caps ranging from CA$1.2b to CA$3.9b, we found that the median CEO total compensation was CA$4.1m. From this we gather that Stephen Liptrap is paid around the median for CEOs in the industry. What's more, Stephen Liptrap holds CA$552k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CA$644k	CA$613k	20%
Other	CA$2.5m	CA$2.0m	80%
Total Compensation	CA$3.2m	CA$2.6m	100%

Speaking on an industry level, nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. Morneau Shepell pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Morneau Shepell Inc.'s Growth Numbers

Morneau Shepell Inc. has seen its earnings per share (EPS) increase by 10% a year over the past three years. Its revenue is up 10% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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?

We think that the total shareholder return of 37%, over three years, would leave most Morneau Shepell Inc. shareholders smiling. 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.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is a bit unpleasant) in Morneau Shepell we think you should know about.

Important note: Morneau Shepell is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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