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Ellis Jacob has been the CEO of Cineplex Inc. (TSE:CGX) since 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ellis Jacob's Compensation Compare With Similar Sized Companies?
According to our data, Cineplex Inc. has a market capitalization of CA$1.5b, and pays its CEO total annual compensation worth CA$4.2m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$1.0m. When we examined a selection of companies with market caps ranging from CA$522m to CA$2.1b, we found the median CEO total compensation was CA$2.1m.
It would therefore appear that Cineplex Inc. pays Ellis Jacob 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. 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 Cineplex has changed from year to year.
Is Cineplex Inc. Growing?
On average over the last three years, Cineplex Inc. has shrunk earnings per share by 26% each year (measured with a line of best fit). It achieved revenue growth of 2.4% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Cineplex Inc. Been A Good Investment?
With a three year total loss of 48%, Cineplex Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Cineplex Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cineplex.
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.
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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. Thank you for reading.