Yahoo Finance Is CGI Inc.'s (TSE:GIB.A) CEO Overpaid Relative To Its Peers?
George Schindler became the CEO of CGI Inc. (TSE:GIB.A) in 2016. First, this article will compare CEO compensation with compensation at other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for CGI
How Does George Schindler's Compensation Compare With Similar Sized Companies?
Our data indicates that CGI Inc. is worth CA$28b, and total annual CEO compensation was reported as CA$8.6m for the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at CA$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over CA$10b and the median CEO total compensation was CA$9.4m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So George Schindler is paid around the average of 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.
You can see a visual representation of the CEO compensation at CGI, below.
Is CGI Inc. Growing?
CGI Inc. has increased its earnings per share (EPS) by an average of 8.3% a year, over the last three years (using a line of best fit). It achieved revenue growth of 5.6% over the last year.
I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has CGI Inc. Been A Good Investment?
Most shareholders would probably be pleased with CGI Inc. for providing a total return of 61% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
George Schindler is paid around what is normal the leaders of larger companies.
While the growth could be better, the shareholder returns are clearly good. So we can conclude that on this analysis the CEO compensation seems pretty sound. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CGI.
Important note: CGI 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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