In 2008 George Cope was appointed CEO of BCE Inc. (TSE:BCE). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does George Cope's Compensation Compare With Similar Sized Companies?
Our data indicates that BCE Inc. is worth CA$57b, and total annual CEO compensation was reported as CA$12m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$1.4m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over CA$11b and the median CEO total compensation was CA$9.1m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Thus we can conclude that George Cope receives more in total compensation than the median of a group of large companies in the same market as BCE Inc.. However, this doesn't necessarily mean the pay 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 BCE has changed from year to year.
Is BCE Inc. Growing?
BCE Inc. saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. In the last year, its revenue is up 2.5%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has BCE Inc. Been A Good Investment?
BCE Inc. has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at BCE Inc. with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BCE (free visualization of insider trades).
If you want to buy a stock that is better than BCE, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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