Is Saputo Inc. (TSE:SAP) Excessively Paying Its CEO?

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Lino Saputo became the CEO of Saputo Inc. (TSE:SAP) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Saputo

How Does Lino Saputo's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Saputo Inc. has a market cap of CA$15b, and is paying total annual CEO compensation of CA$11m. (This figure is for the year to March 2019). Notably, that's an increase of 176% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$1.3m. We took a group of companies with market capitalizations over CA$10b, and calculated the median CEO total compensation to be CA$8.8m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

That means Lino Saputo receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Saputo has changed from year to year.

Is Saputo Inc. Growing?

Over the last three years Saputo Inc. has grown its earnings per share (EPS) by an average of 7.7% per year (using a line of best fit). It achieved revenue growth of 17% over the last year.

I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching.

Has Saputo Inc. Been A Good Investment?

Saputo Inc. has not done too badly by shareholders, with a total return of 6.8%, over three years. 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...

Lino Saputo is paid around what is normal the leaders of larger companies.

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. Whatever your view on compensation, you might want to check if insiders are buying or selling Saputo shares (free trial).

Important note: Saputo 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.