Most Shareholders Will Probably Find That The CEO Compensation For Intact Financial Corporation (TSE:IFC) Is Reasonable

Key Insights

• Intact Financial's Annual General Meeting to take place on 8th of May
• CEO Charles Joseph Brindamour's total compensation includes salary of CA$1.30m
• The total compensation is similar to the average for the industry
• Intact Financial's EPS declined by 1.4% over the past three years while total shareholder return over the past three years was 49%

Despite strong share price growth of 49% for Intact Financial Corporation (TSE:IFC) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 8th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Intact Financial

How Does Total Compensation For Charles Joseph Brindamour Compare With Other Companies In The Industry?

At the time of writing, our data shows that Intact Financial Corporation has a market capitalization of CA$40b, and reported total annual CEO compensation of CA$15m for the year to December 2023. That's a notable increase of 22% 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 Canadian Insurance industry with market capitalizations above CA$11b, we found that the median total CEO compensation was CA$13m. So it looks like Intact Financial compensates Charles Joseph Brindamour in line with the median for the industry. Furthermore, Charles Joseph Brindamour directly owns CA$88m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$1.3m	CA$1.3m	9%
Other	CA$14m	CA$11m	91%
Total Compensation	CA$15m	CA$12m	100%

On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. In Intact Financial'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.

Intact Financial Corporation's Growth

Over the last three years, Intact Financial Corporation has shrunk its earnings per share by 1.4% per year. It saw its revenue drop 5.0% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Intact Financial Corporation Been A Good Investment?

Most shareholders would probably be pleased with Intact Financial Corporation for providing a total return of 49% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Intact Financial that investors should be aware of in a dynamic business environment.

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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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.