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How Should Investors React To Sun Life Financial Inc.'s (TSE:SLF) CEO Pay?

Simply Wall St

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Dean Connor became the CEO of Sun Life Financial Inc. (TSE:SLF) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Sun Life Financial

How Does Dean Connor's Compensation Compare With Similar Sized Companies?

Our data indicates that Sun Life Financial Inc. is worth CA$33b, and total annual CEO compensation is CA$9.7m. (This is based on the year to December 2018). That's a fairly small increase of 6.2% on year before. While we always look at total compensation first, we note that the salary component is less, at CA$1.1m. We took a group of companies with market capitalizations over CA$11b, and calculated the median CEO total compensation to be CA$8.8m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

So Dean Connor 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.

You can see a visual representation of the CEO compensation at Sun Life Financial, below.

TSX:SLF CEO Compensation, May 7th 2019

Is Sun Life Financial Inc. Growing?

Sun Life Financial Inc. has increased its earnings per share (EPS) by an average of 2.3% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -8.0%.

I generally like to see a little revenue growth, but the improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.

Has Sun Life Financial Inc. Been A Good Investment?

Most shareholders would probably be pleased with Sun Life Financial Inc. for providing a total return of 44% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Dean Connor is paid around the same as most CEOs of large companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So all things considered I'd venture that the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Sun Life Financial shares (free trial).

Important note: Sun Life Financial 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.