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Is Boralex Inc.'s (TSE:BLX) CEO Pay Justified?

Simply Wall St

Patrick Lemaire became the CEO of Boralex Inc. (TSE:BLX) in 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Boralex

How Does Patrick Lemaire's Compensation Compare With Similar Sized Companies?

Our data indicates that Boralex Inc. is worth CA$2.1b, and total annual CEO compensation was reported as CA$1.3m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$421k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from CA$1.3b to CA$4.2b, we found the median CEO total compensation was CA$2.9m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Boralex, below.

TSX:BLX CEO Compensation, October 27th 2019

Is Boralex Inc. Growing?

Boralex Inc. has reduced its earnings per share by an average of 60% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 15%.

Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Boralex Inc. Been A Good Investment?

Boralex Inc. has served shareholders reasonably well, with a total return of 23% 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...

It appears that Boralex Inc. remunerates its CEO below most similar sized companies.

Shareholders should note that compensation for Patrick Lemaire is under the median of a group of similar sized companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. Whatever your view on compensation, you might want to check if insiders are buying or selling Boralex shares (free trial).

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.