Should You Be Pleased About The CEO Pay At Indigo Books & Music Inc.’s (TSE:IDG)

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Heather Reisman has been the CEO of Indigo Books & Music Inc. (TSE:IDG) since 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Indigo Books & Music

How Does Heather Reisman’s Compensation Compare With Similar Sized Companies?

According to our data, Indigo Books & Music Inc. has a market capitalization of CA$218m, and pays its CEO total annual compensation worth CA$1.0m. (This figure is for the year to March 2019). That’s a notable increase of 33% on last year. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$1.0m. We looked at a group of companies with market capitalizations from CA$131m to CA$523m, and the median CEO total compensation was CA$825k.

That means Heather Reisman 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, below, how CEO compensation at Indigo Books & Music has changed over time.

TSX:IDG CEO Compensation, July 12th 2019
TSX:IDG CEO Compensation, July 12th 2019

Is Indigo Books & Music Inc. Growing?

On average over the last three years, Indigo Books & Music Inc. has shrunk earnings per share by 79% each year (measured with a line of best fit). It saw its revenue drop -3.0% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has Indigo Books & Music Inc. Been A Good Investment?

Since shareholders would have lost about 53% over three years, some Indigo Books & Music Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Remuneration for Heather Reisman is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. So shareholders might not feel great about the fact that CEO pay increased on last year. Suffice it to say, we don’t think the CEO is underpaid! Shareholders may want to check for free if Indigo Books & Music insiders are buying or selling shares.

Important note: Indigo Books & Music may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.