Our Take On CGI's (TSE:GIB.A) CEO Salary
George Schindler became the CEO of CGI Inc. (TSE:GIB.A) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for CGI
Comparing CGI Inc.'s CEO Compensation With the industry
Our data indicates that CGI Inc. has a market capitalization of CA$24b, and total annual CEO compensation was reported as CA$9.5m for the year to September 2020. We note that's a decrease of 8.6% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$946k.
For comparison, other companies in the industry with market capitalizations above CA$10b, reported a median total CEO compensation of CA$13m. So it looks like CGI compensates George Schindler in line with the median for the industry. Furthermore, George Schindler directly owns CA$2.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | CA$946k | CA$1.4m | 10% |
Other | CA$8.5m | CA$9.0m | 90% |
Total Compensation | CA$9.5m | CA$10m | 100% |
On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. It's interesting to note that CGI allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
CGI Inc.'s Growth
CGI Inc. has seen its earnings per share (EPS) increase by 8.3% a year over the past three years. Revenue was pretty flat on last year.
We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has CGI Inc. Been A Good Investment?
CGI Inc. has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As previously discussed, George is compensated close to the median for companies of its size, and which belong to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for CGI that investors should look into moving forward.
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.
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. 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.
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