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How Much Is Great-West Lifeco's (TSE:GWO) CEO Getting Paid?

Simply Wall St
·4 mins read

Paul Mahon became the CEO of Great-West Lifeco Inc. (TSE:GWO) in 2013, 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.

See our latest analysis for Great-West Lifeco

How Does Total Compensation For Paul Mahon Compare With Other Companies In The Industry?

According to our data, Great-West Lifeco Inc. has a market capitalization of CA$26b, and paid its CEO total annual compensation worth CA$7.6m over the year to December 2019. That's just a smallish increase of 7.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.3m.

In comparison with other companies in the industry with market capitalizations over CA$11b , the reported median total CEO compensation was CA$8.4m. This suggests that Great-West Lifeco remunerates its CEO largely in line with the industry average. Moreover, Paul Mahon also holds CA$4.3m worth of Great-West Lifeco 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$1.3m

CA$1.2m

16%

Other

CA$6.4m

CA$5.9m

84%

Total Compensation

CA$7.6m

CA$7.1m

100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. There isn't a significant difference between Great-West Lifeco and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Great-West Lifeco Inc.'s Growth

Over the past three years, Great-West Lifeco Inc. has seen its earnings per share (EPS) grow by 1.0% per year. It achieved revenue growth of 27% over the last year.

It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Great-West Lifeco Inc. Been A Good Investment?

Given the total shareholder loss of 10% over three years, many shareholders in Great-West Lifeco Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Great-West Lifeco Inc. 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. Meanwhile, Great-West Lifeco is suffering from adverse shareholder returns and althoughEPS have grown over the past three years, they have not been extraordinary. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Paul deserves a raise.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Great-West Lifeco (free visualization of insider trades).

Switching gears from Great-West Lifeco, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.