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D. Patterson has been the CEO of FirstService Corporation (TSE:FSV) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does D. Patterson's Compensation Compare With Similar Sized Companies?
According to our data, FirstService Corporation has a market capitalization of CA$4.6b, and pays its CEO total annual compensation worth US$4.0m. (This is based on the year to December 2018). That's a notable increase of 19% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$608k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$3.0m.
Thus we can conclude that D. Patterson receives more in total compensation than the median of a group of companies in the same market, and of similar size to FirstService Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at FirstService has changed from year to year.
Is FirstService Corporation Growing?
Over the last three years FirstService Corporation has grown its earnings per share (EPS) by an average of 33% per year (using a line of best fit). In the last year, its revenue is up 12%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has FirstService Corporation Been A Good Investment?
I think that the total shareholder return of 103%, over three years, would leave most FirstService Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by FirstService Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if FirstService insiders are buying or selling shares.
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.
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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.