In 2011, Dean Connor was appointed CEO of Sun Life Financial Inc. (TSE:SLF). This analysis aims first to contrast CEO compensation with 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Dean Connor's Compensation Compare With Similar Sized Companies?
Our data indicates that Sun Life Financial Inc. is worth CA$27b, and total annual CEO compensation was reported as CA$9.6m for the year to December 2019. That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over CA$11b, and calculated the median CEO total compensation to be CA$9.3m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. It's interesting to note that Sun Life Financial allocates a smaller portion of compensation to salary in comparison to the broader industry.
That means Dean Connor receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Sun Life Financial has changed over time.
Is Sun Life Financial Inc. Growing?
On average over the last three years, Sun Life Financial Inc. has seen earnings per share (EPS) move in a favourable direction by 1.4% each year (using a line of best fit). Its revenue is up 7.2% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sun Life Financial Inc. Been A Good Investment?
Sun Life Financial Inc. has served shareholders reasonably well, with a total return of 13% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Dean Connor is close enough to the median pay for a CEO of a large company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Sun Life Financial that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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