Stock Analysis

What Can We Conclude About CGI's (TSE:GIB.A) CEO Pay?

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TSX:GIB.A
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George Schindler has been the CEO of CGI Inc. (TSE:GIB.A) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for CGI.

Check out our latest analysis for CGI

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

At the time of writing, our data shows that CGI Inc. has a market capitalization of CA$26b, and reported total annual CEO compensation of CA$9.5m for the year to September 2020. That's a notable decrease of 8.6% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$946k.

In comparison with other companies in the industry with market capitalizations over CA$10b , the reported median total CEO compensation was CA$14m. In other words, CGI pays its CEO lower than the industry median. Furthermore, George Schindler directly owns CA$3.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary CA$946k CA$1.4m 10%
Other CA$8.5m CA$9.0m 90%
Total CompensationCA$9.5m CA$10m100%

Talking in terms of the industry, salary represented approximately 62% of total compensation out of all the companies we analyzed, while other remuneration made up 38% of the pie. It's interesting to note that CGI allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
TSX:GIB.A CEO Compensation January 24th 2021

A Look at CGI Inc.'s Growth Numbers

CGI Inc.'s earnings per share (EPS) grew 7.0% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has CGI Inc. Been A Good Investment?

We think that the total shareholder return of 45%, over three years, would leave most CGI Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, George is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. Considering this fine result for investors, we believe CEO compensation to be apt.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for CGI that you should be aware of before investing.

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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About TSX:GIB.A

CGI

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services in Canada; Western, Southern, Central, and Eastern Europe; Australia; Scandinavia; Finland, Poland, and Baltics; the United States; the United Kingdom; and the Asia Pacific.

Solid track record with excellent balance sheet.