Yahoo Finance How Much Did Emera's (TSE:EMA) CEO Pocket Last Year?
Scott Balfour became the CEO of Emera Incorporated (TSE:EMA) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Emera
Comparing Emera Incorporated's CEO Compensation With the industry
Our data indicates that Emera Incorporated has a market capitalization of CA$14b, and total annual CEO compensation was reported as CA$6.7m for the year to December 2019. We note that's an increase of 9.8% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.0m.
For comparison, other companies in the industry with market capitalizations above CA$10b, reported a median total CEO compensation of CA$13m. In other words, Emera pays its CEO lower than the industry median. Moreover, Scott Balfour also holds CA$2.9m worth of Emera stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$1.0m | CA$987k | 15% |
Other | CA$5.7m | CA$5.1m | 85% |
Total Compensation | CA$6.7m | CA$6.1m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Emera is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Emera Incorporated's Growth Numbers
Emera Incorporated has seen its earnings per share (EPS) increase by 9.2% a year over the past three years. Its revenue is down 11% over the previous year.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Emera Incorporated Been A Good Investment?
With a total shareholder return of 30% over three years, Emera Incorporated shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we touched on above, Emera Incorporated is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS growth and shareholder returns over the past three years have not impressed us. Consequently, despite CEO compensation being reasonable by all accounts, shareholders will likely want to see more growth before they agree to a potential bump.
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 3 warning signs for Emera you should be aware of, and 1 of them is concerning.
Important note: Emera 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.
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. 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.
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