Galen Weston became the CEO of George Weston Limited (TSE:WN) 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for George Weston.
How Does Total Compensation For Galen Weston Compare With Other Companies In The Industry?
At the time of writing, our data shows that George Weston Limited has a market capitalization of CA$15b, and reported total annual CEO compensation of CA$9.3m for the year to December 2019. We note that's an increase of 18% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.2m.
In comparison with other companies in the industry with market capitalizations over CA$10b , the reported median total CEO compensation was CA$10m. So it looks like George Weston compensates Galen Weston in line with the median for the industry. Moreover, Galen Weston also holds CA$11m worth of George Weston stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. In George Weston's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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 George Weston Limited's Growth Numbers
George Weston Limited's earnings per share (EPS) grew 4.7% per year over the last three years. It achieved revenue growth of 6.6% over the last year.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 George Weston Limited Been A Good Investment?
Given the total shareholder loss of 6.8% over three years, many shareholders in George Weston Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Galen is compensated close to the median for companies of its size, and which belong to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Galen deserves a raise.
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. In our study, we found 2 warning signs for George Weston you should be aware of, and 1 of them is a bit concerning.
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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