Here's Why CGI Inc.'s (TSE:GIB.A) CEO Compensation Is The Least Of Shareholders' Concerns

CEO George Schindler has done a decent job of delivering relatively good performance at CGI Inc. (TSE:GIB.A) recently. As shareholders go into the upcoming AGM on 01 February 2023, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for CGI

How Does Total Compensation For George Schindler Compare With Other Companies In The Industry?

According to our data, CGI Inc. has a market capitalization of CA$27b, and paid its CEO total annual compensation worth CA$14m over the year to September 2022. That's a fairly small increase of 6.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.7m.

On comparing similar companies in the Canadian IT industry with market capitalizations above CA$11b, we found that the median total CEO compensation was CA$15m. So it looks like CGI compensates George Schindler in line with the median for the industry. Moreover, George Schindler also holds CA$7.5m worth of CGI stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	CA$1.7m	CA$1.6m	12%
Other	CA$12m	CA$11m	88%
Total Compensation	CA$14m	CA$13m	100%

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. CGI sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

CGI Inc.'s Growth

Over the past three years, CGI Inc. has seen its earnings per share (EPS) grow by 10% per year. It achieved revenue growth of 6.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 CGI Inc. Been A Good Investment?

CGI Inc. has served shareholders reasonably well, with a total return of 11% 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.

In Summary...

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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for CGI that investors should be aware of in a dynamic business environment.

Switching gears from CGI, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.