How Much Did ATCO Ltd.'s (TSE:ACO.X) CEO Pocket Last Year?

In 2000, Nancy Southern was appointed CEO of ATCO Ltd. (TSE:ACO.X). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for ATCO

How Does Nancy Southern's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that ATCO Ltd. has a market cap of CA$4.2b, and reported total annual CEO compensation of CA$2.1m for the year to December 2019. That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at CA$1.0m. When we examined a selection of companies with market caps ranging from CA$2.8b to CA$9.0b, we found the median CEO total compensation was CA$4.2m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where ATCO stands. Speaking on an industry level, we can see that nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. ATCO pays out 48% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

At first glance this seems like a real positive for shareholders, since Nancy Southern is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at ATCO, below.

Is ATCO Ltd. Growing?

ATCO Ltd. has seen earnings per share (EPS) move positively by an average of 28% a year, over the last three years (using a line of best fit). Its revenue is down 5.8% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has ATCO Ltd. Been A Good Investment?

Given the total loss of 20% over three years, many shareholders in ATCO Ltd. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It looks like ATCO Ltd. pays its CEO less than similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. We're not critical of the remuneration Nancy Southern receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is an important area to keep your eyes on, but we've also identified 4 warning signs for ATCO (2 are a bit unpleasant!) that you should be aware of before investing here.

Important note: ATCO may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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. 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. Thank you for reading.