How Should Investors React To TC Energy Corporation’s (TSE:TRP) CEO Pay?

In 2010 Russ Girling was appointed CEO of TC Energy Corporation (TSE:TRP). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for TC Energy

How Does Russ Girling’s Compensation Compare With Similar Sized Companies?

According to our data, TC Energy Corporation has a market capitalization of CA$63b, and pays its CEO total annual compensation worth CA$13m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$1.4m. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$8.9m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

As you can see, Russ Girling is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean TC Energy Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at TC Energy has changed over time.

TSX:TRP CEO Compensation, September 3rd 2019
TSX:TRP CEO Compensation, September 3rd 2019

Is TC Energy Corporation Growing?

TC Energy Corporation has increased its earnings per share (EPS) by an average of 84% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 3.6%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has TC Energy Corporation Been A Good Investment?

With a total shareholder return of 32% over three years, TC Energy Corporation shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared the total CEO remuneration paid by TC Energy Corporation, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling TC Energy (free visualization of insider trades).

Important note: TC Energy may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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 editorial-team@simplywallst.com. 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. Thank you for reading.