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Should You Worry About Cascades Inc.'s (TSE:CAS) CEO Pay Cheque?

Simply Wall St

Mario Plourde became the CEO of Cascades Inc. (TSE:CAS) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Cascades

How Does Mario Plourde's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Cascades Inc. has a market cap of CA$1.1b, and reported total annual CEO compensation of CA$3.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at CA$897k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from CA$525m to CA$2.1b, and the median CEO total compensation was CA$2.0m.

As you can see, Mario Plourde is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Cascades 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.

You can see, below, how CEO compensation at Cascades has changed over time.

TSX:CAS CEO Compensation, October 19th 2019

Is Cascades Inc. Growing?

Over the last three years Cascades Inc. has shrunk its earnings per share by an average of 14% per year (measured with a line of best fit). In the last year, its revenue is up 9.3%.

Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Cascades Inc. Been A Good Investment?

With a three year total loss of 1.1%, Cascades Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Cascades Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Arguably worse, investors are without a positive return for the last three years. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Cascades shares (free trial).

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.

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 editorial-team@simplywallst.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. Thank you for reading.