In 2014 David Friesema was appointed CEO of Sleep Country Canada Holdings Inc. (TSE:ZZZ). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Sleep Country Canada Holdings
How Does David Friesema's Compensation Compare With Similar Sized Companies?
According to our data, Sleep Country Canada Holdings Inc. has a market capitalization of CA$764m, and pays its CEO total annual compensation worth CA$1.9m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$530k. We examined companies with market caps from CA$263m to CA$1.1b, and discovered that the median CEO compensation of that group was CA$1.3m.
Thus we can conclude that David Friesema receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sleep Country Canada Holdings Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Sleep Country Canada Holdings has changed over time.
Is Sleep Country Canada Holdings Inc. Growing?
Over the last three years Sleep Country Canada Holdings Inc. has grown its earnings per share (EPS) by an average of 56% per year (using a line of best fit). Its revenue is up 5.9% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Sleep Country Canada Holdings Inc. Been A Good Investment?
With a total shareholder return of 13% over three years, Sleep Country Canada Holdings Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at Sleep Country Canada Holdings Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Sleep Country Canada Holdings shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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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.