Should You Be Pleased About The CEO Pay At Capital Power Corporation's (TSE:CPX)

Brian Vaasjo became the CEO of Capital Power Corporation (TSE:CPX) in 2009. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Capital Power

How Does Brian Vaasjo's Compensation Compare With Similar Sized Companies?

Our data indicates that Capital Power Corporation is worth CA$2.6b, and total annual CEO compensation was reported as CA$3.4m for the year to December 2019. That's a modest increase of 2.1% on the prior year year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$725k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from CA$1.4b to CA$4.4b, and discovered that the median CEO total compensation of that group was CA$2.8m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Capital Power. Talking in terms of the sector, salary represented approximately 35% of total compensation out of all the companies we analysed, while other remuneration made up 65% of the pie. Capital Power sets aside a smaller share of compensation for salary, in comparison to the overall industry.

So Brian Vaasjo receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at Capital Power has changed from year to year.

Is Capital Power Corporation Growing?

Capital Power Corporation has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 37%.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has Capital Power Corporation Been A Good Investment?

Capital Power Corporation has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. 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...

Brian Vaasjo is paid around the same as most CEOs of similar size companies.

We see room for improved growth, as well as fairly unremarkable returns over the last three years. While the CEO may not be underpaid, we don't think the pay is too generous either. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Capital Power (1 shouldn't be ignored!) that you should be aware of before investing here.

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. 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.