Yahoo Finance We Take A Look At Why Stantec Inc.'s (TSE:STN) CEO Has Earned Their Pay Packet
Key Insights
Stantec's Annual General Meeting to take place on 9th of May
CEO Gord Johnston's total compensation includes salary of CA$1.40m
The total compensation is similar to the average for the industry
Over the past three years, Stantec's EPS grew by 27% and over the past three years, the total shareholder return was 117%
We have been pretty impressed with the performance at Stantec Inc. (TSE:STN) recently and CEO Gord Johnston deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 9th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
See our latest analysis for Stantec
Comparing Stantec Inc.'s CEO Compensation With The Industry
According to our data, Stantec Inc. has a market capitalization of CA$13b, and paid its CEO total annual compensation worth CA$8.6m over the year to December 2023. Notably, that's an increase of 14% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.4m.
For comparison, other companies in the Canadian Construction industry with market capitalizations ranging between CA$5.5b and CA$16b had a median total CEO compensation of CA$9.8m. From this we gather that Gord Johnston is paid around the median for CEOs in the industry. What's more, Gord Johnston holds CA$10.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$1.4m | CA$1.3m | 16% |
Other | CA$7.2m | CA$6.3m | 84% |
Total Compensation | CA$8.6m | CA$7.6m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Stantec pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Stantec Inc.'s Growth Numbers
Over the past three years, Stantec Inc. has seen its earnings per share (EPS) grow by 27% per year. Its revenue is up 14% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Stantec Inc. Been A Good Investment?
Boasting a total shareholder return of 117% over three years, Stantec Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Stantec that investors should think about before committing capital to this stock.
Important note: Stantec is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
