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In 2003 Brian McManus was appointed CEO of Stella-Jones Inc. (TSE:SJ). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Brian McManus’s Compensation Compare With Similar Sized Companies?
Our data indicates that Stella-Jones Inc. is worth CA$3.0b, and total annual CEO compensation is CA$1.7m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$650k. We looked at a group of companies with market capitalizations from CA$1.3b to CA$4.2b, and the median CEO compensation was CA$2.8m.
Most shareholders would consider it a positive that Brian McManus takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Stella-Jones, below.
Is Stella-Jones Inc. Growing?
Over the last three years Stella-Jones Inc. has grown its earnings per share (EPS) by an average of 4.8% per year (using a line of best fit). It achieved revenue growth of 12% over the last year.
I would argue that the modest growth in revenue is a notable positive. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Stella-Jones Inc. Been A Good Investment?
With a three year total loss of 7.0%, Stella-Jones Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Stella-Jones Inc. pays its CEO less than similar sized companies.
It’s well worth noting that while Brian McManus is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Stella-Jones.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.