Here's What We Learned About The CEO Pay At Transcontinental Inc. (TSE:TCL.A)

Francois Olivier has been the CEO of Transcontinental Inc. (TSE:TCL.A) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Transcontinental.

See our latest analysis for Transcontinental

How Does Total Compensation For Francois Olivier Compare With Other Companies In The Industry?

Our data indicates that Transcontinental Inc. has a market capitalization of CA$1.9b, and total annual CEO compensation was reported as CA$7.0m for the year to October 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.1m.

On examining similar-sized companies in the industry with market capitalizations between CA$1.3b and CA$4.1b, we discovered that the median CEO total compensation of that group was CA$5.8m. From this we gather that Francois Olivier is paid around the median for CEOs in the industry. Moreover, Francois Olivier also holds CA$3.4m worth of Transcontinental stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. It's interesting to note that Transcontinental allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Transcontinental Inc.'s Growth

Transcontinental Inc. has reduced its earnings per share by 18% a year over the last three years. Its revenue is down 15% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Transcontinental Inc. Been A Good Investment?

With a total shareholder return of 3.9% over three years, Transcontinental Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Transcontinental Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Transcontinental has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Transcontinental that investors should think about before committing capital to this 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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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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