The Compensation For CGI Inc.'s (TSE:GIB.A) CEO Looks Deserved And Here's Why

Key Insights

• CGI to hold its Annual General Meeting on 31st of January
• Salary of CA$1.86m is part of CEO George Schindler's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, CGI's EPS grew by 18% and over the past three years, the total shareholder return was 48%

The performance at CGI Inc. (TSE:GIB.A) has been quite strong recently and CEO George Schindler has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 31st of January. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for CGI

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

Our data indicates that CGI Inc. has a market capitalization of CA$34b, and total annual CEO compensation was reported as CA$14m for the year to September 2023. That's just a smallish increase of 5.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.9m.

For comparison, other companies in the Canadian IT industry with market capitalizations above CA$11b, reported a median total CEO compensation of CA$18m. So it looks like CGI compensates George Schindler in line with the median for the industry. Moreover, George Schindler also holds CA$12m worth of CGI stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$1.9m	CA$1.7m	13%
Other	CA$13m	CA$12m	87%
Total Compensation	CA$14m	CA$14m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. CGI pays a modest slice of remuneration through salary, as compared 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 CGI Inc.'s Growth Numbers

CGI Inc. has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 CGI Inc. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, CGI Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Shareholders may want to check for free if CGI insiders are buying or selling shares.

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.

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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.