Yousry Bissada became the CEO of Home Capital Group Inc. (TSE:HCG) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Yousry Bissada's Compensation Compare With Similar Sized Companies?
According to our data, Home Capital Group Inc. has a market capitalization of CA$1.7b, and paid its CEO total annual compensation worth CA$2.4m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$700k. 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 from CA$1.3b to CA$4.2b, and the median CEO total compensation was CA$2.8m.
So Yousry Bissada is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Home Capital Group has changed over time.
Is Home Capital Group Inc. Growing?
Home Capital Group Inc. has reduced its earnings per share by an average of 28% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Home Capital Group Inc. Been A Good Investment?
Home Capital Group Inc. has served shareholders reasonably well, with a total return of 13% 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.
Yousry Bissada is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We do not think the CEO pay is a problem, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. So you may want to check if insiders are buying Home Capital Group shares with their own money (free access).
Important note: Home Capital Group 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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