Yahoo Finance Is Tree Island Steel Ltd.'s (TSE:TSL) CEO Paid Enough Relative To Peers?
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Dale MacLean is the CEO of Tree Island Steel Ltd. (TSE:TSL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Tree Island Steel
How Does Dale MacLean's Compensation Compare With Similar Sized Companies?
According to our data, Tree Island Steel Ltd. has a market capitalization of CA$59m, and pays its CEO total annual compensation worth CA$909k. (This figure is for the year to December 2018). That's a notable increase of 85% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$400k. We took a group of companies with market capitalizations below CA$267m, and calculated the median CEO total compensation to be CA$140k.
As you can see, Dale MacLean is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Tree Island Steel Ltd. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Tree Island Steel has changed from year to year.
Is Tree Island Steel Ltd. Growing?
On average over the last three years, Tree Island Steel Ltd. has shrunk earnings per share by 89% each year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Tree Island Steel Ltd. Been A Good Investment?
Given the total loss of 29% over three years, many shareholders in Tree Island Steel Ltd. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared the total CEO remuneration paid by Tree Island Steel Ltd., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. Notably, the CEO remuneration is actually up on last year. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Tree Island Steel (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
