Yahoo Finance Here's Why Aecon Group Inc.'s (TSE:ARE) CEO Compensation Is The Least Of Shareholders' Concerns
Key Insights
Aecon Group's Annual General Meeting to take place on 4th of June
Salary of CA$1.06m is part of CEO Jean-Louis Servranckx's total remuneration
The overall pay is comparable to the industry average
Over the past three years, Aecon Group's EPS grew by 25% and over the past three years, the total shareholder return was 5.9%
Under the guidance of CEO Jean-Louis Servranckx, Aecon Group Inc. (TSE:ARE) has performed reasonably well recently. As shareholders go into the upcoming AGM on 4th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.
Check out our latest analysis for Aecon Group
Comparing Aecon Group Inc.'s CEO Compensation With The Industry
Our data indicates that Aecon Group Inc. has a market capitalization of CA$1.1b, and total annual CEO compensation was reported as CA$5.4m for the year to December 2023. We note that's a decrease of 11% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$1.1m.
On comparing similar companies from the Canadian Construction industry with market caps ranging from CA$546m to CA$2.2b, we found that the median CEO total compensation was CA$4.3m. From this we gather that Jean-Louis Servranckx is paid around the median for CEOs in the industry. Moreover, Jean-Louis Servranckx also holds CA$91k worth of Aecon Group stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$1.1m | CA$1.0m | 20% |
Other | CA$4.4m | CA$5.1m | 80% |
Total Compensation | CA$5.4m | CA$6.1m | 100% |
On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Our data reveals that Aecon Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Aecon Group Inc.'s Growth
Over the past three years, Aecon Group Inc. has seen its earnings per share (EPS) grow by 25% per year. Its revenue is down 9.0% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Aecon Group Inc. Been A Good Investment?
With a total shareholder return of 5.9% over three years, Aecon Group Inc. has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
To Conclude...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Aecon Group you should be aware of, and 1 of them is potentially serious.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
