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Here's Why Shareholders Will Not Be Complaining About GDI Integrated Facility Services Inc.'s (TSE:GDI) CEO Pay Packet

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We have been pretty impressed with the performance at GDI Integrated Facility Services Inc. (TSE:GDI) recently and CEO Claude Bigras deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 07 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for GDI Integrated Facility Services

How Does Total Compensation For Claude Bigras Compare With Other Companies In The Industry?

At the time of writing, our data shows that GDI Integrated Facility Services Inc. has a market capitalization of CA$1.3b, and reported total annual CEO compensation of CA$3.3m for the year to December 2020. We note that's an increase of 52% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$751k.

On examining similar-sized companies in the industry with market capitalizations between CA$495m and CA$2.0b, we discovered that the median CEO total compensation of that group was CA$3.8m. So it looks like GDI Integrated Facility Services compensates Claude Bigras in line with the median for the industry. Furthermore, Claude Bigras directly owns CA$155m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

CA$751k

CA$678k

23%

Other

CA$2.5m

CA$1.5m

77%

Total Compensation

CA$3.3m

CA$2.2m

100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. GDI Integrated Facility Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

GDI Integrated Facility Services Inc.'s Growth

Over the past three years, GDI Integrated Facility Services Inc. has seen its earnings per share (EPS) grow by 62% per year. It achieved revenue growth of 9.8% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has GDI Integrated Facility Services Inc. Been A Good Investment?

Boasting a total shareholder return of 232% over three years, GDI Integrated Facility Services Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for GDI Integrated Facility Services that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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