Yahoo Finance Should You Worry About Maple Leaf Foods Inc.'s (TSE:MFI) CEO Pay?
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Michael McCain has been the CEO of Maple Leaf Foods Inc. (TSE:MFI) since 1999. First, this article will compare CEO compensation with compensation at similar sized 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. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Maple Leaf Foods
How Does Michael McCain's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Maple Leaf Foods Inc. has a market cap of CA$3.5b, and is paying total annual CEO compensation of CA$6.7m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at CA$1.1m. When we examined a selection of companies with market caps ranging from CA$2.6b to CA$8.4b, we found the median CEO total compensation was CA$4.0m.
It would therefore appear that Maple Leaf Foods Inc. pays Michael McCain more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Maple Leaf Foods, below.
Is Maple Leaf Foods Inc. Growing?
On average over the last three years, Maple Leaf Foods Inc. has grown earnings per share (EPS) by 3.7% each year (using a line of best fit). Its revenue is up 1.6% over last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Maple Leaf Foods Inc. Been A Good Investment?
Maple Leaf Foods Inc. has not done too badly by shareholders, with a total return of 9.5%, over three years. 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...
We examined the amount Maple Leaf Foods Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. So you may want to check if insiders are buying Maple Leaf Foods shares with their own money (free access).
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.
