Does Dollarama Inc.'s (TSE:DOL) CEO Pay Reflect Performance?

Neil Rossy became the CEO of Dollarama Inc. (TSE:DOL) in 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Dollarama

How Does Neil Rossy's Compensation Compare With Similar Sized Companies?

According to our data, Dollarama Inc. has a market capitalization of CA$12b, and paid its CEO total annual compensation worth CA$3.9m over the year to February 2019. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$5.4b to CA$16b. The median total CEO compensation was CA$4.9m.

That means Neil Rossy receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Dollarama, below.

Is Dollarama Inc. Growing?

Dollarama Inc. has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). Its revenue is up 10% over last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Dollarama Inc. Been A Good Investment?

Dollarama Inc. has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. 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.

In Summary...

Neil Rossy is paid around what is normal the leaders of comparable size companies.

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Dollarama shares with their own money (free access).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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