Our View On Polaris Infrastructure's (TSE:PIF) CEO Pay

Marc Murnaghan became the CEO of Polaris Infrastructure Inc. (TSE:PIF) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Polaris Infrastructure.

See our latest analysis for Polaris Infrastructure

How Does Total Compensation For Marc Murnaghan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Polaris Infrastructure Inc. has a market capitalization of CA$291m, and reported total annual CEO compensation of US$578k for the year to December 2019. We note that's an increase of 16% above last year. We note that the salary portion, which stands at US$355.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between CA$128m and CA$512m, we discovered that the median CEO total compensation of that group was US$248k. This suggests that Marc Murnaghan is paid more than the median for the industry. What's more, Marc Murnaghan holds CA$7.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Polaris Infrastructure is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Polaris Infrastructure Inc.'s Growth Numbers

Polaris Infrastructure Inc.'s earnings per share (EPS) grew 95% per year over the last three years. It achieved revenue growth of 3.2% 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Polaris Infrastructure Inc. Been A Good Investment?

Polaris Infrastructure Inc. has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, Polaris Infrastructure pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Polaris Infrastructure we think you should know about.

Important note: Polaris Infrastructure is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. 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.
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