Increases to FirstService Corporation's (TSE:FSV) CEO Compensation Might Cool off for now
Key Insights
FirstService to hold its Annual General Meeting on 3rd of April
CEO D. Patterson's total compensation includes salary of US$832.7k
The overall pay is 278% above the industry average
FirstService's EPS grew by 3.0% over the past three years while total shareholder return over the past three years was 23%
Under the guidance of CEO D. Patterson, FirstService Corporation (TSE:FSV) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 3rd of April. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
View our latest analysis for FirstService
Comparing FirstService Corporation's CEO Compensation With The Industry
According to our data, FirstService Corporation has a market capitalization of CA$10b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2023. We note that's an increase of 51% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$833k.
For comparison, other companies in the Canadian Real Estate industry with market capitalizations ranging between CA$5.4b and CA$16b had a median total CEO compensation of US$1.8m. Hence, we can conclude that D. Patterson is remunerated higher than the industry median. Moreover, D. Patterson also holds CA$13m worth of FirstService stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$833k | US$811k | 13% |
Other | US$5.8m | US$3.6m | 87% |
Total Compensation | US$6.6m | US$4.4m | 100% |
Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. FirstService pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
FirstService Corporation's Growth
FirstService Corporation's earnings per share (EPS) grew 3.0% per year over the last three years. In the last year, its revenue is up 16%.
We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has FirstService Corporation Been A Good Investment?
FirstService Corporation has generated a total shareholder return of 23% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for FirstService that investors should think about before committing capital to this stock.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
