What Can We Make Of Winpak's (TSE:WPK) CEO Compensation?

Olivier Muggli has been the CEO of Winpak Ltd. (TSE:WPK) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Winpak

How Does Total Compensation For Olivier Muggli Compare With Other Companies In The Industry?

At the time of writing, our data shows that Winpak Ltd. has a market capitalization of CA$2.8b, and reported total annual CEO compensation of US$1.1m for the year to December 2019. That's a notable decrease of 16% on last year. In particular, the salary of US$579.5k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from CA$1.3b to CA$4.1b, the reported median CEO total compensation was US$1.3m. So it looks like Winpak compensates Olivier Muggli in line with the median for the industry.

On an industry level, roughly 38% of total compensation represents salary and 62% is other remuneration. It's interesting to note that Winpak pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Winpak Ltd.'s Growth

Earnings per share at Winpak Ltd. are much the same as they were three years ago, albeit slightly lower. Its revenue is down 2.4% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Winpak Ltd. Been A Good Investment?

With a three year total loss of 5.3% for the shareholders, Winpak Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Winpak Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Winpak.

Important note: Winpak 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. 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.
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