Stock Analysis
David Eckert became the CEO of Yellow Pages Limited (TSE:Y) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Yellow Pages.
Check out our latest analysis for Yellow Pages
How Does Total Compensation For David Eckert Compare With Other Companies In The Industry?
Our data indicates that Yellow Pages Limited has a market capitalization of CA$356m, and total annual CEO compensation was reported as CA$2.8m for the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$875k.
On comparing similar companies from the same industry with market caps ranging from CA$129m to CA$514m, we found that the median CEO total compensation was CA$752k. Accordingly, our analysis reveals that Yellow Pages Limited pays David Eckert north of the industry median. Moreover, David Eckert also holds CA$8.8m worth of Yellow Pages stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CA$875k | CA$875k | 31% |
| Other | CA$2.0m | CA$1.9m | 69% |
| Total Compensation | CA$2.8m | CA$2.8m | 100% |
On an industry level, roughly 93% of total compensation represents salary and 6.6% is other remuneration. Yellow Pages pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Yellow Pages Limited's Growth
Yellow Pages Limited has seen its earnings per share (EPS) increase by 104% a year over the past three years. It saw its revenue drop 19% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Yellow Pages Limited Been A Good Investment?
Most shareholders would probably be pleased with Yellow Pages Limited for providing a total return of 62% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As previously discussed, David is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that David deserves a raise!
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Yellow Pages that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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About TSX:Y
Yellow Pages
Through its subsidiaries, provides digital and print media, and marketing solutions to small and medium-sized enterprises in Canada.
Flawless balance sheet, good value and pays a dividend.
