Does Innergex Renewable Energy Inc.’s (TSE:INE) CEO Salary Reflect Performance?
In 2007 Michel Letellier was appointed CEO of Innergex Renewable Energy Inc. (TSE:INE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
See our latest analysis for Innergex Renewable Energy
How Does Michel Letellier’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Innergex Renewable Energy Inc. has a market cap of CA$1.7b, and is paying total annual CEO compensation of CA$1.4m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at CA$527k. We examined companies with market caps from CA$1.4b to CA$4.3b, and discovered that the median CEO compensation of that group was CA$2.9m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Innergex Renewable Energy, below.
Is Innergex Renewable Energy Inc. Growing?
On average over the last three years, Innergex Renewable Energy Inc. has grown earnings per share (EPS) by 83% each year. In the last year, its revenue is up 41%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Innergex Renewable Energy Inc. Been A Good Investment?
With a total shareholder return of 22% over three years, Innergex Renewable Energy Inc. shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
It looks like Innergex Renewable Energy Inc. pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Michel Letellier is overcompensated.
It’s good to see reasonable payment of the CEO, even while the business improves. It would be an additional positive if insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Innergex Renewable Energy shares (free trial).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
