Roy Gori has been the CEO of Manulife Financial Corporation (TSE:MFC) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Manulife Financial pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Roy Gori Compare With Other Companies In The Industry?
According to our data, Manulife Financial Corporation has a market capitalization of CA$36b, and paid its CEO total annual compensation worth CA$15m over the year to December 2019. We note that's an increase of 13% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.5m.
In comparison with other companies in the industry with market capitalizations over CA$11b , the reported median total CEO compensation was CA$9.1m. This suggests that Roy Gori is paid more than the median for the industry. What's more, Roy Gori holds CA$8.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. In Manulife Financial's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Manulife Financial Corporation's Growth Numbers
Manulife Financial Corporation has seen its earnings per share (EPS) increase by 2.0% a year over the past three years. Its revenue is up 31% over the last year.
It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Manulife Financial Corporation Been A Good Investment?
With a three year total loss of 19% for the shareholders, Manulife Financial Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Manulife Financial pays its CEO higher than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Roy is remunerated higher than the industry average. Taking all this into account, it could be hard to get shareholder support for giving Roy a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Manulife Financial that you should be aware of before investing.
Important note: Manulife Financial is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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