Stock Analysis

Most Shareholders Will Probably Agree With Great-West Lifeco Inc.'s (TSE:GWO) CEO Compensation

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CEO Paul Mahon has done a decent job of delivering relatively good performance at Great-West Lifeco Inc. (TSE:GWO) recently. As shareholders go into the upcoming AGM on 06 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See 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$33b, and reported total annual CEO compensation of CA$7.9m for the year to December 2020. That's just a smallish increase of 3.1% on last year. 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 industry with market capitalizations above CA$9.9b, we found that the median total CEO compensation was CA$10m. This suggests that Great-West Lifeco remunerates its CEO largely in line with the industry average. What's more, Paul Mahon holds CA$6.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary CA$1.3m CA$1.3m 17%
Other CA$6.6m CA$6.4m 83%
Total CompensationCA$7.9m CA$7.6m100%

Talking in terms of the industry, salary represented approximately 26% of total compensation out of all the companies we analyzed, while other remuneration made up 74% of the pie. Great-West Lifeco sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TSX:GWO CEO Compensation April 30th 2021

A Look at Great-West Lifeco Inc.'s Growth Numbers

Great-West Lifeco Inc.'s earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 36% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

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

Great-West Lifeco Inc. has served shareholders reasonably well, with a total return of 25% 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Great-West Lifeco that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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