Power Corporation of Canada's (TSE:POW) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• Power Corporation of Canada will host its Annual General Meeting on 9th of May
• Salary of CA$4.50m is part of CEO Jeff Orr's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Power Corporation of Canada's EPS grew by 5.1% and over the past three years, the total shareholder return was 21%

Under the guidance of CEO Jeff Orr, Power Corporation of Canada (TSE:POW) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 9th of May. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Power Corporation of Canada

How Does Total Compensation For Jeff Orr Compare With Other Companies In The Industry?

Our data indicates that Power Corporation of Canada has a market capitalization of CA$24b, and total annual CEO compensation was reported as CA$14m for the year to December 2023. That's a modest increase of 5.7% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$4.5m.

In comparison with other companies in the Canadian Insurance industry with market capitalizations over CA$11b, the reported median total CEO compensation was CA$13m. This suggests that Power Corporation of Canada remunerates its CEO largely in line with the industry average. Furthermore, Jeff Orr directly owns CA$25m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$4.5m	CA$4.5m	32%
Other	CA$9.6m	CA$8.8m	68%
Total Compensation	CA$14m	CA$13m	100%

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. According to our research, Power Corporation of Canada has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Power Corporation of Canada's Growth Numbers

Power Corporation of Canada's earnings per share (EPS) grew 5.1% per year over the last three years. Its revenue is up 3.2% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Power Corporation of Canada Been A Good Investment?

Power Corporation of Canada has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

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. 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.

So you may want to check if insiders are buying Power Corporation of Canada shares with their own money (free access).

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.