Yahoo Finance Should You Worry About Martinrea International Inc.'s (TSE:MRE) CEO Salary Level?
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Pat D'Eramo has been the CEO of Martinrea International Inc. (TSE:MRE) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Martinrea International
How Does Pat D'Eramo's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Martinrea International Inc. has a market cap of CA$877m, and is paying total annual CEO compensation of CA$4.3m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at CA$818k. We examined companies with market caps from CA$524m to CA$2.1b, and discovered that the median CEO total compensation of that group was CA$2.0m.
It would therefore appear that Martinrea International Inc. pays Pat D'Eramo 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Martinrea International has changed over time.
Is Martinrea International Inc. Growing?
On average over the last three years, Martinrea International Inc. has grown earnings per share (EPS) by 28% each year (using a line of best fit). It achieved revenue growth of 1.9% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Martinrea International Inc. Been A Good Investment?
I think that the total shareholder return of 40%, over three years, would leave most Martinrea International Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Martinrea International Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Martinrea International shares (free trial).
If you want to buy a stock that is better than Martinrea International, this free list of high return, low debt companies is a great place to look.
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.
