Should You Worry About Canadian Utilities Limited's (TSE:CU) CEO Pay Cheque?

In 2000 Nancy Southern was appointed CEO of Canadian Utilities Limited (TSE:CU). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Canadian Utilities

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

According to our data, Canadian Utilities Limited has a market capitalization of CA$10.0b, and pays its CEO total annual compensation worth CA$4.4m. (This is based on the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$881k. When we examined a selection of companies with market caps ranging from CA$5.3b to CA$16b, we found the median CEO total compensation was CA$5.5m.

That means Nancy Southern receives fairly typical remuneration for the CEO of a company that size. 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.

You can see a visual representation of the CEO compensation at Canadian Utilities, below.

Is Canadian Utilities Limited Growing?

Canadian Utilities Limited has increased its earnings per share (EPS) by an average of 5.6% a year, over the last three years (using a line of best fit). Its revenue is up 7.1% over last year.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Canadian Utilities Limited Been A Good Investment?

Canadian Utilities Limited has served shareholders reasonably well, with a total return of 17% over three years. 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...

Remuneration for Nancy Southern is close enough to the median pay for a CEO of a similar sized company .

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Canadian Utilities shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this freelist of interesting companies, that have HIGH return on equity and low debt.

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