Most Shareholders Will Probably Agree With Brookfield Corporation's (TSE:BN) CEO Compensation

Key Insights

• Brookfield to hold its Annual General Meeting on 6th of June
• Total pay for CEO James Flatt includes US$375.0k salary
• The overall pay is 55% below the industry average
• Over the past three years, Brookfield's EPS fell by 51% and over the past three years, the total shareholder return was 56%

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Performance at Brookfield Corporation (TSE:BN) has been rather uninspiring recently and shareholders may be wondering how CEO James Flatt plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 6th of June. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Brookfield

How Does Total Compensation For James Flatt Compare With Other Companies In The Industry?

At the time of writing, our data shows that Brookfield Corporation has a market capitalization of CA$122b, and reported total annual CEO compensation of US$7.5m for the year to December 2024. We note that's an increase of 25% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$375k.

On comparing similar companies in the Canadian Capital Markets industry with market capitalizations above CA$11b, we found that the median total CEO compensation was US$17m. This suggests that James Flatt is paid below the industry median. Furthermore, James Flatt directly owns CA$4.3b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Investors may find it interesting that Brookfield paid a marginal salary to James Flatt, over the past year, focusing on non-salary compensation instead. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Brookfield Corporation's Growth Numbers

Over the last three years, Brookfield Corporation has shrunk its earnings per share by 51% per year. In the last year, its revenue is down 15%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Brookfield Corporation Been A Good Investment?

Most shareholders would probably be pleased with Brookfield Corporation for providing a total return of 56% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Brookfield primarily uses non-salary benefits to reward its CEO. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

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. We identified 4 warning signs for Brookfield (2 are a bit unpleasant!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.