Yahoo Finance Should You Worry About Fortis Inc.’s (TSE:FTS) CEO Pay Cheque?
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Barry Perry became the CEO of Fortis Inc. (TSE:FTS) in 2015. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Fortis
How Does Barry Perry’s Compensation Compare With Similar Sized Companies?
According to our data, Fortis Inc. has a market capitalization of CA$20b, and pays its CEO total annual compensation worth CA$9.3m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$1.2m. When we examined a group of companies with market caps over CA$11b, we found that their median CEO compensation was CA$8.6m. 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 Barry Perry receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Fortis has changed from year to year.
Is Fortis Inc. Growing?
Fortis Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease. The trailing twelve months of revenue was pretty much the same as the prior period.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Fortis Inc. Been A Good Investment?
Fortis Inc. has generated a total shareholder return of 27% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
Remuneration for Barry Perry is close enough to the median pay for a CEO of a large company .
We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn’t say the CEO pay is too high, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. Shareholders may want to check for free if Fortis insiders are buying or selling shares.
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
