Increases to Manulife Financial Corporation's (TSE:MFC) CEO Compensation Might Cool off for now

Key Insights

• Manulife Financial's Annual General Meeting to take place on 9th of May
• Salary of CA$1.73m is part of CEO Roy Gori's total remuneration
• The overall pay is 54% above the industry average
• Over the past three years, Manulife Financial's EPS fell by 3.2% and over the past three years, the total shareholder return was 45%

Performance at Manulife Financial Corporation (TSE:MFC) has been reasonably good and CEO Roy Gori has done a decent job of steering the company in the right direction. 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 9th of May. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Manulife Financial

Comparing Manulife Financial Corporation's CEO Compensation With The Industry

According to our data, Manulife Financial Corporation has a market capitalization of CA$58b, and paid its CEO total annual compensation worth CA$19m over the year to December 2023. We note that's an increase of 13% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.7m.

For comparison, other companies in the Canadian Insurance industry with market capitalizations above CA$11b, reported a median total CEO compensation of CA$13m. Hence, we can conclude that Roy Gori is remunerated higher than the industry median. Furthermore, Roy Gori directly owns CA$20m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$1.7m	CA$1.5m	9%
Other	CA$18m	CA$16m	91%
Total Compensation	CA$19m	CA$17m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. In Manulife 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.

Manulife Financial Corporation's Growth

Over the last three years, Manulife Financial Corporation has shrunk its earnings per share by 3.2% per year. Its revenue is up 61% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Manulife Financial Corporation Been A Good Investment?

Boasting a total shareholder return of 45% over three years, Manulife Financial Corporation has done well by shareholders. 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.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

Whatever your view on compensation, you might want to check if insiders are buying or selling Manulife Financial shares (free trial).

Switching gears from Manulife Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.