In 2004 Duncan Newton Jackman was appointed CEO of E-L Financial Corporation Limited (TSE:ELF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Duncan Newton Jackman's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that E-L Financial Corporation Limited has a market cap of CA$3.1b, and reported total annual CEO compensation of CA$1.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$961k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$1.3b to CA$4.3b. The median total CEO compensation was CA$2.9m.
Most shareholders would consider it a positive that Duncan Newton Jackman takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at E-L Financial has changed over time.
Is E-L Financial Corporation Limited Growing?
On average over the last three years, E-L Financial Corporation Limited has shrunk earnings per share by 31% each year (measured with a line of best fit). In the last year, its revenue is up 17%.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has E-L Financial Corporation Limited Been A Good Investment?
With a total shareholder return of 14% over three years, E-L Financial Corporation Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
E-L Financial Corporation Limited is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Duncan Newton Jackman is under the median of a group of similar sized companies. But the company lacks earnings per share growth, and returns to shareholders are less than stellar. There is room for improved company performance, but we don't see the CEO pay as a big issue here. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling E-L Financial (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.