Shareholders Would Not Be Objecting To Stella-Jones Inc.'s (TSE:SJ) CEO Compensation And Here's Why

Key Insights

• Stella-Jones will host its Annual General Meeting on 7th of May
• CEO Eric Vachon's total compensation includes salary of CA$850.0k
• The total compensation is similar to the average for the industry
• Stella-Jones' total shareholder return over the past three years was 97% while its EPS grew by 18% over the past three years

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The performance at Stella-Jones Inc. (TSE:SJ) has been quite strong recently and CEO Eric Vachon has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 7th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for Stella-Jones

Comparing Stella-Jones Inc.'s CEO Compensation With The Industry

According to our data, Stella-Jones Inc. has a market capitalization of CA$3.7b, and paid its CEO total annual compensation worth CA$6.4m over the year to December 2024. We note that's a decrease of 8.2% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$850k.

On examining similar-sized companies in the Canadian Forestry industry with market capitalizations between CA$2.8b and CA$8.9b, we discovered that the median CEO total compensation of that group was CA$6.4m. This suggests that Stella-Jones remunerates its CEO largely in line with the industry average. Moreover, Eric Vachon also holds CA$302k worth of Stella-Jones stock directly under their own name.

Speaking on an industry level, nearly 37% of total compensation represents salary, while the remainder of 63% is other remuneration. In Stella-Jones' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Stella-Jones Inc.'s Growth

Stella-Jones Inc. has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is up 4.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Stella-Jones Inc. Been A Good Investment?

We think that the total shareholder return of 97%, over three years, would leave most Stella-Jones Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Stella-Jones that investors should think about before committing capital to this stock.

Important note: Stella-Jones is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.