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Is IGM Financial Inc.'s (TSE:IGM) CEO Paid Enough Relative To Peers?

Simply Wall St

In 2013 Jeff Carney was appointed CEO of IGM Financial Inc. (TSE:IGM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for IGM Financial

How Does Jeff Carney's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that IGM Financial Inc. has a market cap of CA$8.8b, and reported total annual CEO compensation of CA$7.3m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.3m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from CA$5.3b to CA$16b, we found the median CEO total compensation was CA$5.2m.

As you can see, Jeff Carney is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean IGM Financial Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at IGM Financial, below.

TSX:IGM CEO Compensation, October 18th 2019

Is IGM Financial Inc. Growing?

Over the last three years IGM Financial Inc. has shrunk its earnings per share by an average of 1.9% per year (measured with a line of best fit). It achieved revenue growth of 2.3% over the last year.

The lack of earnings per share growth in the last three years is unimpressive. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has IGM Financial Inc. Been A Good Investment?

With a total shareholder return of 23% over three years, IGM Financial Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We examined the amount IGM Financial Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling IGM Financial shares (free trial).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.