U.S. markets closed
  • S&P Futures

    4,550.25
    +5.75 (+0.13%)
     
  • Dow Futures

    35,428.00
    +39.00 (+0.11%)
     
  • Nasdaq Futures

    15,609.00
    +21.75 (+0.14%)
     
  • Russell 2000 Futures

    2,254.40
    +4.90 (+0.22%)
     
  • Crude Oil

    80.85
    -1.81 (-2.19%)
     
  • Gold

    1,801.60
    +2.80 (+0.16%)
     
  • Silver

    24.09
    -0.10 (-0.40%)
     
  • EUR/USD

    1.1609
    +0.0003 (+0.02%)
     
  • 10-Yr Bond

    1.5290
    -0.0900 (-5.56%)
     
  • Vix

    16.98
    +1.00 (+6.26%)
     
  • GBP/USD

    1.3742
    -0.0000 (-0.00%)
     
  • USD/JPY

    113.6080
    -0.2020 (-0.18%)
     
  • BTC-USD

    58,898.64
    -1,858.97 (-3.06%)
     
  • CMC Crypto 200

    1,411.75
    -62.58 (-4.24%)
     
  • FTSE 100

    7,253.27
    -24.35 (-0.33%)
     
  • Nikkei 225

    28,825.62
    -272.62 (-0.94%)
     

We Discuss Why Saputo Inc.'s (TSE:SAP) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The underwhelming performance at Saputo Inc. (TSE:SAP) recently has probably not pleased shareholders. At the upcoming AGM on 05 August 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Saputo

How Does Total Compensation For Lino Saputo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Saputo Inc. has a market capitalization of CA$15b, and reported total annual CEO compensation of CA$4.3m for the year to March 2021. That's a notable increase of 8.5% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.4m.

On comparing similar companies in the industry with market capitalizations above CA$10.0b, we found that the median total CEO compensation was CA$15m. In other words, Saputo pays its CEO lower than the industry median. Furthermore, Lino Saputo directly owns CA$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2021

2020

Proportion (2021)

Salary

CA$1.4m

CA$1.3m

32%

Other

CA$3.0m

CA$2.7m

68%

Total Compensation

CA$4.3m

CA$4.0m

100%

On an industry level, roughly 56% of total compensation represents salary and 44% is other remuneration. Saputo sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Saputo Inc.'s Growth

Over the last three years, Saputo Inc. has shrunk its earnings per share by 12% per year. Its revenue is down 4.3% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Saputo Inc. Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Saputo Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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. We did our research and spotted 1 warning sign for Saputo that investors should look into moving forward.

Switching gears from Saputo, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.