Most Shareholders Will Probably Agree With IGM Financial Inc.'s (TSE:IGM) CEO Compensation

Key Insights

• IGM Financial to hold its Annual General Meeting on 3rd of May
• Salary of CA$1.20m is part of CEO James O'Sullivan's total remuneration
• Total compensation is 35% below industry average
• IGM Financial's EPS grew by 6.7% over the past three years while total shareholder loss over the past three years was 7.4%

Performance at IGM Financial Inc. (TSE:IGM) has been rather uninspiring recently and shareholders may be wondering how CEO James O'Sullivan plans to fix this. At the next AGM coming up on 3rd of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

See our latest analysis for IGM Financial

How Does Total Compensation For James O'Sullivan Compare With Other Companies In The Industry?

Our data indicates that IGM Financial Inc. has a market capitalization of CA$8.1b, and total annual CEO compensation was reported as CA$7.4m for the year to December 2023. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.2m.

On comparing similar companies from the Canadian Capital Markets industry with market caps ranging from CA$5.5b to CA$16b, we found that the median CEO total compensation was CA$11m. That is to say, James O'Sullivan is paid under the industry median. Furthermore, James O'Sullivan directly owns CA$1.5m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$1.2m	CA$1.2m	16%
Other	CA$6.2m	CA$6.1m	84%
Total Compensation	CA$7.4m	CA$7.3m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. IGM Financial 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.

IGM Financial Inc.'s Growth

IGM Financial Inc. has seen its earnings per share (EPS) increase by 6.7% a year over the past three years. Its revenue is up 6.9% over the last year.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has IGM Financial Inc. Been A Good Investment?

With a three year total loss of 7.4% for the shareholders, IGM Financial Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The lack lustre share price performance may have something to do with the flat earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

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 1 warning sign for IGM Financial that investors should think about before committing capital to this stock.

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.