Great-West Lifeco Inc.'s (TSE:GWO) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Great-West Lifeco's Annual General Meeting to take place on 8th of May
• Salary of CA$1.26m is part of CEO Paul Mahon's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Great-West Lifeco's EPS grew by 8.6% and over the past three years, the total shareholder return was 79%

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Under the guidance of CEO Paul Mahon, Great-West Lifeco Inc. (TSE:GWO) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 8th of May. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Great-West Lifeco

How Does Total Compensation For Paul Mahon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Great-West Lifeco Inc. has a market capitalization of CA$49b, and reported total annual CEO compensation of CA$13m for the year to December 2024. Notably, that's an increase of 17% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$1.3m.

On comparing similar companies in the Canadian Insurance industry with market capitalizations above CA$11b, we found that the median total CEO compensation was CA$13m. From this we gather that Paul Mahon is paid around the median for CEOs in the industry. Moreover, Paul Mahon also holds CA$16m worth of Great-West Lifeco stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	CA$1.3m	CA$1.3m	10%
Other	CA$11m	CA$9.6m	90%
Total Compensation	CA$13m	CA$11m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. In Great-West Lifeco's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Great-West Lifeco Inc.'s Growth

Great-West Lifeco Inc. has seen its earnings per share (EPS) increase by 8.6% a year over the past three years. Its revenue is up 11% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Great-West Lifeco Inc. Been A Good Investment?

Most shareholders would probably be pleased with Great-West Lifeco Inc. for providing a total return of 79% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

Whatever your view on compensation, you might want to check if insiders are buying or selling Great-West Lifeco shares (free trial).

Important note: Great-West Lifeco is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.