Rich Kruger became the CEO of Imperial Oil Limited (TSE:IMO) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Rich Kruger’s Compensation Compare With Similar Sized Companies?
According to our data, Imperial Oil Limited has a market capitalization of CA$25b, and pays its CEO total annual compensation worth CA$7.9m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$1.2m. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$9.1m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
That means Rich Kruger receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Imperial Oil has changed from year to year.
Is Imperial Oil Limited Growing?
On average over the last three years, Imperial Oil Limited has grown earnings per share (EPS) by 23% each year (using a line of best fit). In the last year, its revenue is up 4.2%.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Has Imperial Oil Limited Been A Good Investment?
Given the total loss of 14% over three years, many shareholders in Imperial Oil Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Rich Kruger is paid around what is normal the leaders of larger companies.
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Imperial Oil (free visualization of insider trades).
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