Al Monaco has been the CEO of Enbridge Inc. (TSE:ENB) since 2012. First, this article will compare CEO compensation with compensation at other large 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 Al Monaco's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Enbridge Inc. has a market cap of CA$104b, and reported total annual CEO compensation of CA$9.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$7.3m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
As you can see, Al Monaco is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Enbridge Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Enbridge has changed over time.
Is Enbridge Inc. Growing?
On average over the last three years, Enbridge Inc. has grown earnings per share (EPS) by 11% each year (using a line of best fit). Its revenue is up 3.3% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Enbridge Inc. Been A Good Investment?
Enbridge Inc. has generated a total shareholder return of 6.7% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Enbridge Inc. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Enbridge (free visualization of insider trades).
If you want to buy a stock that is better than Enbridge, this free list of high return, low debt companies is a great place to look.
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