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A Look At Enbridge's (TSE:ENB) CEO Remuneration

Simply Wall St

Al Monaco became the CEO of Enbridge Inc. ( TSE:ENB ) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Enbridge

How Does Total Compensation For Al Monaco Compare With Other Companies In The Industry?

Our data indicates that Enbridge Inc. has a market capitalization of CA$87b, and total annual CEO compensation was reported as CA$18m for the year to December 2019. We note that's an increase of 38% above last year. Following discussions with the company representative, Tracie Kenyon, we wish to highlight that the increase was mostly due to increase in pension value. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.6m.

In comparison with other companies in the industry with market capitalizations over CA$11b , the reported median total CEO compensation was CA$12m. Hence, we can conclude that Al Monaco is remunerated higher than the industry median. Moreover, Al Monaco also holds CA$39m worth of Enbridge stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

CA$1.6m

CA$1.5m

9%

Other

CA$16m

CA$11.5m

91%

Total Compensation

CA$18m

CA$13m

100%

Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. In Enbridge's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Enbridge Inc.'s Growth Numbers

Over the last three years, Enbridge Inc. has shrunk its earnings per share by 15% per year. In the last year, its revenue is down 10%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings. .

Has Enbridge Inc. Been A Good Investment?

With a total shareholder return of 1.8% over three years, Enbridge Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As previously discussed, Al is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look great when you realize that the company has been suffering from negative earnings growth for the last three years. And shareholder returns are decent but not great. So you can understand why we do not think CEO compensation is particularly modest!

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Enbridge (2 are significant!) that you should be aware of before investing here.

Important note: Enbridge 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com .