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Is Metro Inc.'s (TSE:MRU) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Eric La Flèche has been the CEO of Metro Inc. (TSE:MRU) since 2008. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Metro

How Does Eric La Flèche's Compensation Compare With Similar Sized Companies?

According to our data, Metro Inc. has a market capitalization of CA$13b, and pays its CEO total annual compensation worth CA$6.6m. (This number is for the twelve months until September 2018). While we always look at total compensation first, we note that the salary component is less, at CA$932k. We took a group of companies with market capitalizations over CA$10b, and calculated the median CEO total compensation to be CA$9.0m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

That means Eric La Flèche receives fairly typical remuneration for the CEO of a large company. 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 Metro has changed from year to year.

TSX:MRU CEO Compensation, July 8th 2019

Is Metro Inc. Growing?

Metro Inc. has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 21%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Metro Inc. Been A Good Investment?

Metro Inc. has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. 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.

In Summary...

Eric La Flèche is paid around the same as most CEOs of large companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Metro.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.