We Think Shareholders Will Probably Be Generous With BRP Inc.'s (TSE:DOO) CEO Compensation
We have been pretty impressed with the performance at BRP Inc. (TSE:DOO) recently and CEO Jose Boisjoli deserves a mention for their role in it. Coming up to the next AGM on 03 June 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
Check out our latest analysis for BRP
Comparing BRP Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that BRP Inc. has a market capitalization of CA$8.5b, and reported total annual CEO compensation of CA$8.5m for the year to January 2021. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from CA$4.8b to CA$15b, the reported median CEO total compensation was CA$6.8m. From this we gather that Jose Boisjoli is paid around the median for CEOs in the industry. Furthermore, Jose Boisjoli directly owns CA$103m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | CA$1.1m | CA$1.1m | 13% |
Other | CA$7.4m | CA$7.3m | 87% |
Total Compensation | CA$8.5m | CA$8.4m | 100% |
On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that BRP allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at BRP Inc.'s Growth Numbers
Over the past three years, BRP Inc. has seen its earnings per share (EPS) grow by 23% per year. It saw its revenue drop 1.6% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 BRP Inc. Been A Good Investment?
Most shareholders would probably be pleased with BRP Inc. for providing a total return of 70% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in BRP we think you should know about.
Important note: BRP 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.
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