Luc Tanguay has been the CEO of Theratechnologies Inc. (TSE:TH) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Luc Tanguay's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Theratechnologies Inc. has a market cap of CA$352m, and reported total annual CEO compensation of US$1.2m for the year to November 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$509k. When we examined a selection of companies with market caps ranging from CA$132m to CA$528m, we found the median CEO total compensation was CA$909k.
So Luc Tanguay is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Theratechnologies has changed from year to year.
Is Theratechnologies Inc. Growing?
Over the last three years Theratechnologies Inc. has shrunk its earnings per share by an average of 17% per year (measured with a line of best fit). Its revenue is up 46% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Theratechnologies Inc. Been A Good Investment?
Most shareholders would probably be pleased with Theratechnologies Inc. for providing a total return of 44% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Luc Tanguay is paid around what is normal the leaders of comparable size companies.
The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Theratechnologies (free visualization of insider trades).
If you want to buy a stock that is better than Theratechnologies, this free list of high return, low debt companies is a great place to look.
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