Stock Analysis

We Think Some Shareholders May Hesitate To Increase Celestica Inc.'s (TSE:CLS) CEO Compensation

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Key Insights

  • Celestica will host its Annual General Meeting on 25th of April
  • CEO Rob Mionis' total compensation includes salary of US$987.7k
  • The total compensation is 35% higher than the average for the industry
  • Celestica's total shareholder return over the past three years was 494% while its EPS grew by 64% over the past three years

CEO Rob Mionis has done a decent job of delivering relatively good performance at Celestica Inc. (TSE:CLS) recently. As shareholders go into the upcoming AGM on 25th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Celestica

How Does Total Compensation For Rob Mionis Compare With Other Companies In The Industry?

Our data indicates that Celestica Inc. has a market capitalization of CA$7.2b, and total annual CEO compensation was reported as US$13m for the year to December 2023. We note that's an increase of 11% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$988k.

On examining similar-sized companies in the Canadian Electronic industry with market capitalizations between CA$5.5b and CA$17b, we discovered that the median CEO total compensation of that group was US$9.3m. Hence, we can conclude that Rob Mionis is remunerated higher than the industry median. Furthermore, Rob Mionis directly owns CA$45m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20232022Proportion (2023)
Salary US$988k US$950k 8%
Other US$12m US$10m 92%
Total CompensationUS$13m US$11m100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. It's interesting to note that Celestica allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

TSX:CLS CEO Compensation April 19th 2024

A Look at Celestica Inc.'s Growth Numbers

Celestica Inc. has seen its earnings per share (EPS) increase by 64% a year over the past three years. It achieved revenue growth of 9.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Celestica Inc. Been A Good Investment?

Most shareholders would probably be pleased with Celestica Inc. for providing a total return of 494% over three years. 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 Celestica that investors should think about before committing capital to this stock.

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.