Galen Weston became the CEO of Loblaw Companies Limited (TSE:L) in 2017. This analysis aims first to contrast CEO compensation with other large companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Galen Weston's Compensation Compare With Similar Sized Companies?
Our data indicates that Loblaw Companies Limited is worth CA$26b, and total annual CEO compensation is CA$4.1m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$590k. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$9.1m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Most shareholders would consider it a positive that Galen Weston takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Loblaw Companies, below.
Is Loblaw Companies Limited Growing?
On average over the last three years, Loblaw Companies Limited has shrunk earnings per share by 5.8% each year (measured with a line of best fit). In the last year, its revenue is up 2.3%.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Loblaw Companies Limited Been A Good Investment?
Loblaw Companies Limited has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Loblaw Companies Limited is currently paying its CEO below what is normal for large companies.
Galen Weston is remunerated more modestly than is a normal at most large companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. Shareholders may want to check for free if Loblaw Companies insiders are buying or selling shares.
Important note: Loblaw Companies 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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.