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Steve Orr became the CEO of Shawcor Ltd. (TSE:SCL) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Steve Orr’s Compensation Compare With Similar Sized Companies?
According to our data, Shawcor Ltd. has a market capitalization of CA$1.4b, and pays its CEO total annual compensation worth CA$3.8m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at CA$800k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$531m to CA$2.1b. The median total CEO compensation was CA$2.0m.
It would therefore appear that Shawcor Ltd. pays Steve Orr more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Shawcor has changed over time.
Is Shawcor Ltd. Growing?
Shawcor Ltd. has increased its earnings per share (EPS) by an average of 7.7% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 1.0%.
I would argue that the improvement in revenue isn’t particularly impressive, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Shawcor Ltd. Been A Good Investment?
With a three year total loss of 24%, Shawcor Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Shawcor Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Shawcor (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.