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Is Corus Entertainment Inc.'s (TSE:CJR.B) CEO Pay Justified?

Simply Wall St

Doug Murphy has been the CEO of Corus Entertainment Inc. (TSE:CJR.B) since 2015. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Corus Entertainment

How Does Doug Murphy's Compensation Compare With Similar Sized Companies?

Our data indicates that Corus Entertainment Inc. is worth CA$1.0b, and total annual CEO compensation was reported as CA$4.1m for the year to August 2018. While we always look at total compensation first, we note that the salary component is less, at CA$900k. 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 looked at a group of companies with market capitalizations from CA$524m to CA$2.1b, and the median CEO total compensation was CA$2.1m.

Thus we can conclude that Doug Murphy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Corus Entertainment Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Corus Entertainment has changed from year to year.

TSX:CJR.B CEO Compensation, October 24th 2019

Is Corus Entertainment Inc. Growing?

Over the last three years Corus Entertainment Inc. has shrunk its earnings per share by an average of 60% per year (measured with a line of best fit). Its revenue is up 2.4% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Corus Entertainment Inc. Been A Good Investment?

Given the total loss of 40% over three years, many shareholders in Corus Entertainment Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount Corus Entertainment Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Corus Entertainment shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.