Yahoo Finance Most Shareholders Will Probably Agree With First National Financial Corporation's (TSE:FN) CEO Compensation
Key Insights
First National Financial will host its Annual General Meeting on 2nd of May
Total pay for CEO Jason Ellis includes CA$1.10m salary
The total compensation is 77% less than the average for the industry
First National Financial's three-year loss to shareholders was 6.3% while its EPS grew by 9.9% over the past three years
Performance at First National Financial Corporation (TSE:FN) has been rather uninspiring recently and shareholders may be wondering how CEO Jason Ellis plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 2nd of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
See our latest analysis for First National Financial
How Does Total Compensation For Jason Ellis Compare With Other Companies In The Industry?
Our data indicates that First National Financial Corporation has a market capitalization of CA$2.3b, and total annual CEO compensation was reported as CA$1.9m for the year to December 2023. That's a notable increase of 36% on last year. In particular, the salary of CA$1.10m, makes up a fairly large portion of the total compensation being paid to the CEO.
In comparison with other companies in the Canadian Diversified Financial industry with market capitalizations ranging from CA$1.4b to CA$4.4b, the reported median CEO total compensation was CA$8.1m. That is to say, Jason Ellis is paid under the industry median. Furthermore, Jason Ellis directly owns CA$76k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$1.1m | CA$1.0m | 59% |
Other | CA$756k | CA$361k | 41% |
Total Compensation | CA$1.9m | CA$1.4m | 100% |
Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. It's interesting to note that First National Financial allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at First National Financial Corporation's Growth Numbers
First National Financial Corporation's earnings per share (EPS) grew 9.9% per year over the last three years. In the last year, its revenue is up 7.5%.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has First National Financial Corporation Been A Good Investment?
Since shareholders would have lost about 6.3% over three years, some First National Financial Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The lack lustre share price performance may have something to do with the flat earnings growth. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for First National Financial you should be aware of, and 1 of them shouldn't be ignored.
Important note: First National Financial 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
