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Does Celestica Inc.'s (TSE:CLS) CEO Salary Reflect Performance?

Simply Wall St

Rob Mionis became the CEO of Celestica Inc. (TSE:CLS) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Celestica

How Does Rob Mionis's Compensation Compare With Similar Sized Companies?

Our data indicates that Celestica Inc. is worth CA$1.1b, and total annual CEO compensation was reported as US$10m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$950k. 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 US$400m to US$1.6b, we found the median CEO total compensation was US$1.6m.

Thus we can conclude that Rob Mionis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Celestica Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Celestica has changed from year to year.

TSX:CLS CEO Compensation, October 22nd 2019

Is Celestica Inc. Growing?

Celestica Inc. has increased its earnings per share (EPS) by an average of 3.9% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.3%.

I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.

Has Celestica Inc. Been A Good Investment?

With a three year total loss of 43%, Celestica Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Celestica Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Celestica.

If you want to buy a stock that is better than Celestica, this free list of high return, low debt companies is a great place to look.

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.