In 2014 Victor Dodig was appointed CEO of Canadian Imperial Bank of Commerce (TSE:CM). 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 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 Victor Dodig's Compensation Compare With Similar Sized Companies?
According to our data, Canadian Imperial Bank of Commerce has a market capitalization of CA$47b, and paid its CEO total annual compensation worth CA$10m over the year to October 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over CA$11b, we found that their median CEO total compensation was CA$9.1m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Victor Dodig receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Canadian Imperial Bank of Commerce has changed from year to year.
Is Canadian Imperial Bank of Commerce Growing?
Over the last three years, Canadian Imperial Bank of Commerce has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. In the last year, its revenue is up 4.8%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Canadian Imperial Bank of Commerce Been A Good Investment?
With a total shareholder return of 1.7% over three years, Canadian Imperial Bank of Commerce has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Victor Dodig is paid around the same as most CEOs of large companies.
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Canadian Imperial Bank of Commerce (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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