Shareholders Will Probably Hold Off On Increasing FirstService Corporation's (TSE:FSV) CEO Compensation For The Time Being

Key Insights

• FirstService's Annual General Meeting to take place on 3rd of April
• CEO D. Patterson's total compensation includes salary of US$832.7k
• The total compensation is 278% higher than the average for the industry
• FirstService's EPS grew by 3.0% over the past three years while total shareholder return over the past three years was 23%

Under the guidance of CEO D. Patterson, FirstService Corporation (TSE:FSV) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 3rd of April. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for FirstService

Comparing FirstService Corporation's CEO Compensation With The Industry

According to our data, FirstService Corporation has a market capitalization of CA$10b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2023. That's a notable increase of 51% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$833k.

On comparing similar companies from the Canadian Real Estate industry with market caps ranging from CA$5.4b to CA$16b, we found that the median CEO total compensation was US$1.8m. Hence, we can conclude that D. Patterson is remunerated higher than the industry median. Furthermore, D. Patterson directly owns CA$13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$833k	US$811k	13%
Other	US$5.8m	US$3.6m	87%
Total Compensation	US$6.6m	US$4.4m	100%

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. In FirstService's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

A Look at FirstService Corporation's Growth Numbers

FirstService Corporation has seen its earnings per share (EPS) increase by 3.0% a year over the past three years. Its revenue is up 16% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 FirstService Corporation Been A Good Investment?

FirstService Corporation has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 FirstService that investors should be aware of in a dynamic business environment.

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. 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.