Randy MacEwen has been the CEO of Ballard Power Systems Inc. (TSE:BLDP) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Ballard Power Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Ballard Power Systems

Comparing Ballard Power Systems Inc.'s CEO Compensation With the industry

Our data indicates that Ballard Power Systems Inc. has a market capitalization of CA$4.6b, and total annual CEO compensation was reported as CA$2.0m for the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$567k.

In comparison with other companies in the industry with market capitalizations ranging from CA$2.7b to CA$8.5b, the reported median CEO total compensation was CA$5.9m. That is to say, Randy MacEwen is paid under the industry median. What's more, Randy MacEwen holds CA$6.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 32% of total compensation represents salary, while the remainder of 68% is other remuneration. There isn't a significant difference between Ballard Power Systems and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Ballard Power Systems Inc.'s Growth

Ballard Power Systems Inc. has reduced its earnings per share by 45% a year over the last three years. In the last year, its revenue is up 24%.

The decrease in earnings could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ballard Power Systems Inc. Been A Good Investment?

We think that the total shareholder return of 468%, over three years, would leave most Ballard Power Systems Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Randy is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. And as we saw, revenue growth and shareholder returns have been rising However, earnings growth has been negative during this time. Negative earnings growth notwithstanding, we can conclude that on this analysis the CEO compensation seems pretty sound.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 4 warning signs for Ballard Power Systems that investors should be aware of in a dynamic business environment.

Important note: Ballard Power Systems is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.