Is Stella-Jones Inc’s (TSE:SJ) CEO Incentives Align With Yours?

In 2003 Brian McManus was appointed CEO of Stella-Jones Inc (TSE:SJ). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Stella-Jones

How Does Brian McManus’s Compensation Compare With Similar Sized Companies?

According to our data, Stella-Jones Inc has a market capitalization of CA$3.0b, and pays its CEO total annual compensation worth CA$2m. That’s below the compensation, last year. We examined companies with market caps from CA$1.3b to CA$4.2b, and discovered that the median CEO compensation of that group was CA$3m.

A first glance this seems like a real positive for shareholders, since Brian McManus is paid less than the average compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Stella-Jones has changed from year to year.

TSX:SJ CEO Compensation October 29th 18
TSX:SJ CEO Compensation October 29th 18

Is Stella-Jones Inc Growing?

On average over the last three years, Stella-Jones Inc has grown earnings per share (EPS) by 6.1% each year. Its revenue is up 6.0% over last year.

I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Stella-Jones Inc Been A Good Investment?

With a three year total loss of 6.0%, Stella-Jones Inc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It looks like Stella-Jones Inc pays its CEO less than similar sized companies.

Brian McManus receives relatively low remuneration compared to similar sized companies. But the company isn’t exactly firing on all cylinders, and returns over three years are not good. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Stella-Jones Inc.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.