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Don Walker has been the CEO of Magna International Inc. (TSE:MG) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Don Walker's Compensation Compare With Similar Sized Companies?
Our data indicates that Magna International Inc. is worth CA$20b, and total annual CEO compensation is US$20m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$325k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$7.0m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, Don Walker is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Magna International Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Magna International has changed from year to year.
Is Magna International Inc. Growing?
Over the last three years Magna International Inc. has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). Its revenue is up 5.6% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Magna International Inc. Been A Good Investment?
I think that the total shareholder return of 38%, over three years, would leave most Magna International Inc. shareholders smiling. 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.
We compared the total CEO remuneration paid by Magna International Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Magna International.
If you want to buy a stock that is better than Magna International, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.