Yahoo Finance How Should Investors React To Imperial Oil Limited’s (TSE:IMO) CEO Pay?
Rich Kruger has been the CEO of Imperial Oil Limited (TSE:IMO) since 2013. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Imperial Oil
How Does Rich Kruger’s Compensation Compare With Similar Sized Companies?
According to our data, Imperial Oil Limited has a market capitalization of CA$32.7b, and pays its CEO total annual compensation worth CA$7m. That’s actually a decrease on the year before. We looked at a group of companies with market capitalizations over CA$10.5b and the median CEO compensation was CA$9m.
So Rich Kruger is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Imperial Oil has changed from year to year.
Is Imperial Oil Limited Growing?
On average over the last three years, Imperial Oil Limited has shrunk earnings per share by 5.7% each year. Its revenue is up 19% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. 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 Imperial Oil Limited Been A Good Investment?
Given the total loss of 0.02% over three years, many shareholders in Imperial Oil Limited 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…
Remuneration for Rich Kruger is close enough to the median pay for a CEO of a large company .
The company isn’t growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don’t think the CEO is underpaid! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Imperial Oil Limited (free visualization of insider trades).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
