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This article will reflect on the compensation paid to Martin Ferron who has served as CEO of North American Construction Group Ltd. (TSE:NOA) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for North American Construction Group.
Comparing North American Construction Group Ltd.'s CEO Compensation With the industry
According to our data, North American Construction Group Ltd. has a market capitalization of CA$227m, and paid its CEO total annual compensation worth CA$2.1m over the year to December 2019. Notably, that's a decrease of 26% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$625k.
In comparison with other companies in the industry with market capitalizations ranging from CA$134m to CA$535m, the reported median CEO total compensation was CA$2.4m. This suggests that North American Construction Group remunerates its CEO largely in line with the industry average. Moreover, Martin Ferron also holds CA$17m worth of North American Construction Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 40% of total compensation out of all the companies we analyzed, while other remuneration made up 60% of the pie. North American Construction Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
North American Construction Group Ltd.'s Growth
Over the past three years, North American Construction Group Ltd. has seen its earnings per share (EPS) grow by 172% per year. In the last year, its revenue is up 51%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth we like to see. 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 North American Construction Group Ltd. Been A Good Investment?
We think that the total shareholder return of 52%, over three years, would leave most North American Construction Group Ltd. 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.
As we touched on above, North American Construction Group Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that earnings per share are up. Indeed, many might consider that Martin is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for North American Construction Group you should be aware of, and 1 of them doesn't sit too well with us.
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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