The CEO Of Metro Inc. (TSE:MRU) Might See A Pay Rise On The Horizon

Key Insights

• Metro will host its Annual General Meeting on 30th of January
• Salary of CA$1.06m is part of CEO Eric La Fleche's total remuneration
• The overall pay is 68% below the industry average
• Metro's EPS grew by 12% over the past three years while total shareholder return over the past three years was 32%

The decent performance at Metro Inc. (TSE:MRU) recently will please most shareholders as they go into the AGM coming up on 30th of January. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Metro

Comparing Metro Inc.'s CEO Compensation With The Industry

Our data indicates that Metro Inc. has a market capitalization of CA$16b, and total annual CEO compensation was reported as CA$6.1m for the year to September 2023. That's a notable increase of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.1m.

For comparison, other companies in the Canadian Consumer Retailing industry with market capitalizations above CA$11b, reported a median total CEO compensation of CA$19m. That is to say, Eric La Fleche is paid under the industry median. What's more, Eric La Fleche holds CA$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	CA$1.1m	CA$1.0m	17%
Other	CA$5.0m	CA$4.3m	83%
Total Compensation	CA$6.1m	CA$5.4m	100%

Speaking on an industry level, nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. In Metro's case, non-salary compensation represents a greater slice of total remuneration, 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.

A Look at Metro Inc.'s Growth Numbers

Over the past three years, Metro Inc. has seen its earnings per share (EPS) grow by 12% per year. In the last year, its revenue is up 9.6%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Metro Inc. Been A Good Investment?

Metro Inc. has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. 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.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Metro.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.