Yahoo Finance Shareholders May Be More Conservative With TransAlta Corporation's (TSE:TA) CEO Compensation For Now
Key Insights
TransAlta to hold its Annual General Meeting on 25th of April
Total pay for CEO John Kousinioris includes CA$950.0k salary
The overall pay is 148% above the industry average
TransAlta's EPS grew by 102% over the past three years while total shareholder loss over the past three years was 24%
The underwhelming share price performance of TransAlta Corporation (TSE:TA) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for TransAlta
How Does Total Compensation For John Kousinioris Compare With Other Companies In The Industry?
At the time of writing, our data shows that TransAlta Corporation has a market capitalization of CA$2.7b, and reported total annual CEO compensation of CA$5.8m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$950k.
On comparing similar companies from the Canadian Renewable Energy industry with market caps ranging from CA$1.4b to CA$4.4b, we found that the median CEO total compensation was CA$2.3m. Accordingly, our analysis reveals that TransAlta Corporation pays John Kousinioris north of the industry median. Furthermore, John Kousinioris directly owns CA$4.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$950k | CA$900k | 16% |
Other | CA$4.9m | CA$4.9m | 84% |
Total Compensation | CA$5.8m | CA$5.8m | 100% |
On an industry level, around 44% of total compensation represents salary and 56% is other remuneration. In TransAlta's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
TransAlta Corporation's Growth
Over the past three years, TransAlta Corporation has seen its earnings per share (EPS) grow by 102% per year. Its revenue is up 13% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has TransAlta Corporation Been A Good Investment?
Since shareholders would have lost about 24% over three years, some TransAlta Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which shouldn't be ignored) in TransAlta we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
