Is Canaccord Genuity Group Inc. (TSE:CF) Overpaying Its CEO?
Dan Daviau became the CEO of Canaccord Genuity Group Inc. (TSE:CF) in 2015. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Canaccord Genuity Group
How Does Dan Daviau's Compensation Compare With Similar Sized Companies?
According to our data, Canaccord Genuity Group Inc. has a market capitalization of CA$379m, and paid its CEO total annual compensation worth CA$11m over the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$850k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from CA$141m to CA$563m, we found the median CEO total compensation was CA$1.1m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Canaccord Genuity Group. On a sector level, around 50% of total compensation represents salary and 50% is other remuneration. It's interesting to note that Canaccord Genuity Group allocates a smaller portion of compensation to salary in comparison to the broader industry.
It would therefore appear that Canaccord Genuity Group Inc. pays Dan Daviau 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 get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Canaccord Genuity Group has changed from year to year.
Is Canaccord Genuity Group Inc. Growing?
Canaccord Genuity Group Inc. has seen earnings per share (EPS) move positively by an average of 58% a year, over the last three years (using a line of best fit). Its revenue is down 3.6% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Canaccord Genuity Group Inc. Been A Good Investment?
Given the total loss of 8.5% over three years, many shareholders in Canaccord Genuity Group Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Canaccord Genuity Group Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Moving away from CEO compensation for the moment, we've identified 4 warning signs for Canaccord Genuity Group that you should be aware of before investing.
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.
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.
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. Thank you for reading.
