How Does Shaw Communications' (TSE:SJR.B) CEO Pay Compare With Company Performance?

This article will reflect on the compensation paid to Brad Shaw who has served as CEO of Shaw Communications Inc. (TSE:SJR.B) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Shaw Communications

Comparing Shaw Communications Inc.'s CEO Compensation With the industry

Our data indicates that Shaw Communications Inc. has a market capitalization of CA$11b, and total annual CEO compensation was reported as CA$6.9m for the year to August 2020. We note that's a decrease of 43% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$2.0m.

On comparing similar companies from the same industry with market caps ranging from CA$5.0b to CA$15b, we found that the median CEO total compensation was CA$8.8m. So it looks like Shaw Communications compensates Brad Shaw in line with the median for the industry. What's more, Brad Shaw holds CA$164m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. It's interesting to note that Shaw Communications allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Shaw Communications Inc.'s Growth

Shaw Communications Inc. has seen its earnings per share (EPS) increase by 4.5% a year over the past three years. Revenue was pretty flat on last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Shaw Communications Inc. Been A Good Investment?

Given the total shareholder loss of 4.6% over three years, many shareholders in Shaw Communications Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Shaw Communications Inc. 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. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Shaw Communications that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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