Yahoo Finance We Discuss Why Morguard Corporation's (TSE:MRC) CEO Compensation May Be Closely Reviewed
Key Insights
Morguard to hold its Annual General Meeting on 8th of May
Salary of CA$1.27m is part of CEO Kuldip Sahi's total remuneration
The overall pay is comparable to the industry average
Morguard's three-year loss to shareholders was 11% while its EPS was down 14% over the past three years
The results at Morguard Corporation (TSE:MRC) have been quite disappointing recently and CEO Kuldip Sahi bears some responsibility for this. At the upcoming AGM on 8th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for Morguard
Comparing Morguard Corporation's CEO Compensation With The Industry
Our data indicates that Morguard Corporation has a market capitalization of CA$1.2b, and total annual CEO compensation was reported as CA$3.2m for the year to December 2023. That's just a smallish increase of 3.3% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$1.3m.
On comparing similar companies from the Canadian Real Estate industry with market caps ranging from CA$550m to CA$2.2b, we found that the median CEO total compensation was CA$2.9m. So it looks like Morguard compensates Kuldip Sahi in line with the median for the industry. Furthermore, Kuldip Sahi directly owns CA$743m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$1.3m | CA$1.2m | 40% |
Other | CA$1.9m | CA$1.8m | 60% |
Total Compensation | CA$3.2m | CA$3.1m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Morguard pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Morguard Corporation's Growth Numbers
Over the last three years, Morguard Corporation has shrunk its earnings per share by 14% per year. In the last year, its revenue is up 8.4%.
The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Morguard Corporation Been A Good Investment?
Given the total shareholder loss of 11% over three years, many shareholders in Morguard Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Morguard (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Morguard 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
