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How Much Does Canadian Pacific Railway's (TSE:CP) CEO Make?

Simply Wall St

Keith Creel became the CEO of Canadian Pacific Railway Limited (TSE:CP) in 2017, 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.

Check out our latest analysis for Canadian Pacific Railway

How Does Total Compensation For Keith Creel Compare With Other Companies In The Industry?

At the time of writing, our data shows that Canadian Pacific Railway Limited has a market capitalization of CA$53b, and reported total annual CEO compensation of CA$15m for the year to December 2019. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$1.5m.

On comparing similar companies in the industry with market capitalizations above CA$11b, we found that the median total CEO compensation was CA$12m. From this we gather that Keith Creel is paid around the median for CEOs in the industry. What's more, Keith Creel holds CA$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

CA$1.5m

CA$1.5m

10%

Other

CA$14m

CA$11m

90%

Total Compensation

CA$15m

CA$12m

100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Canadian Pacific Railway pays a modest slice of remuneration through salary, as compared 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.

ceo-compensation
ceo-compensation

A Look at Canadian Pacific Railway Limited's Growth Numbers

Canadian Pacific Railway Limited has seen its earnings per share (EPS) increase by 15% a year over the past three years. It achieved revenue growth of 3.1% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Canadian Pacific Railway Limited Been A Good Investment?

We think that the total shareholder return of 109%, over three years, would leave most Canadian Pacific Railway Limited shareholders smiling. 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.

To Conclude...

As we noted earlier, Canadian Pacific Railway pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Keith is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Canadian Pacific Railway that investors should look into moving forward.

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.

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