Andrew Clark became the CEO of Park Lawn Corporation (TSE:PLC) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
How Does Andrew Clark's Compensation Compare With Similar Sized Companies?
Our data indicates that Park Lawn Corporation is worth CA$728m, and total annual CEO compensation was reported as CA$751k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$395k. We looked at a group of companies with market capitalizations from CA$265m to CA$1.1b, and the median CEO total compensation was CA$1.4m.
A first glance this seems like a real positive for shareholders, since Andrew Clark is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Park Lawn has changed over time.
Is Park Lawn Corporation Growing?
Over the last three years Park Lawn Corporation has shrunk its earnings per share by an average of 30% per year (measured with a line of best fit). Its revenue is up 75% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Park Lawn Corporation Been A Good Investment?
Most shareholders would probably be pleased with Park Lawn Corporation for providing a total return of 68% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Park Lawn Corporation is currently paying its CEO below what is normal for companies of its size.
Andrew Clark receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Park Lawn shares (free trial).
Important note: Park Lawn may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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