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Dan Daviau became the CEO of Canaccord Genuity Group Inc. (TSE:CF) 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 assess whether Canaccord Genuity Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Canaccord Genuity Group Inc.'s CEO Compensation With the industry
According to our data, Canaccord Genuity Group Inc. has a market capitalization of CA$645m, and paid its CEO total annual compensation worth CA$7.7m over the year to March 2020. We note that's a decrease of 31% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$850k.
On comparing similar companies from the same industry with market caps ranging from CA$265m to CA$1.1b, we found that the median CEO total compensation was CA$3.1m. Accordingly, our analysis reveals that Canaccord Genuity Group Inc. pays Dan Daviau north of the industry median. Furthermore, Dan Daviau directly owns CA$20m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 45% of total compensation represents salary and 55% is other remuneration. Canaccord Genuity Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Canaccord Genuity Group Inc.'s Growth
Canaccord Genuity Group Inc. has seen its earnings per share (EPS) increase by 61% a year over the past three years. In the last year, its revenue is up 2.5%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Canaccord Genuity Group Inc. Been A Good Investment?
Boasting a total shareholder return of 57% over three years, Canaccord Genuity Group Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Canaccord Genuity Group Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Dan's performance creates value for the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Canaccord Genuity Group that investors should look into moving forward.
Important note: Canaccord Genuity Group 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.
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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