Investing

Rogers CEO's Pay Package Is Just One More Reason Investors Should Keep Away From Stock

Will Ashworth

Published: March 28, 2023 10:31 pm

Rogers Communications (CA:RCI.A, CA:RCI.B) CEO Tony Staffieri has been the chief executive of one of Canada’s leading cable and wireless companies for 14 months. Officially appointed on Jan. 11, 2022, The Globe and Mail reported that in his first full year as CEO, Staffieri earned $31.52 million.

Rogers will argue that a big piece of his compensation is for completing the tentative merger with Shaw Communications (CA:SJR). Of the nearly $32 million in 2022 pay, $8 million was compensation for meeting first-year and second-year performance milestones post-merger. The milestones have not been disclosed.

If the merger doesn’t happen, Staffieri will still earn $23.52 million, including $10.70 million in salary, bonus, and stock awards, plus $9.9 million in lifetime pension payments, $1.2 million in stock-option awards for his promotion from COO, and $1.72 million for other compensation.

Better CFO

Comcast (US:CMCSA) CEO Brian Roberts got paid total compensation of US$33.98 million in 2021, the latest year available, 1.5x Staffieri’s 2022 compensation.

There’s only one problem with this comparison. Comcast’s 2022 revenue was US$121.43 billion ($165.89 billion), nearly 11x greater than Rogers’ 2022 sales of $15.40 billion.

Regarding profitability, Comcast’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $36.46 billion ($49.81 billion), nearly 8x as profitable.

One point in Rogers’s favor: Its EBITDA margin was 41.5% in 2022, more than 11 percentage points higher than Comcast’s. However, Rogers doesn’t have nearly as much competition as Comcast, possessing an oligopoly with BCE (CA:BCE) and Telus (US:TU).

Staffieri was the CFO of Rogers from April 2012 until he was fired in September 2021. A bitter boardroom dispute ensued, leading to the dismissal of CEO Joe Natale. Staffieri was then rehired in November 2021 as interim CEO. His role was made permanent in January 2022.

Since Staffieri’s been in the top role, Rogers’s stock has lost 5% of its value. In the time that he was CFO, its stock gained 25%. Over the same period, the S&P/TSX Composite Index appreciated by 65%, 2.5x the cable company’s return.

Third Highest

The Canadian Centre for Policy Alternatives released a report in early January that analyzed the pay of Canada’s 100 highest-paid CEOs of publicly-traded companies. The average pay in 2021 of those 100 CEOs was $14.1 million, 243x the average worker’s salary. The minimum CEO pay to make 2021’s list was $6.7 million.

The top-paid CEO in 2021 was Philip Fayer, head of Nuvei (CA:NVEI), a Montreal-based global payments company. His pay was even more ridiculous than Staffieri’s, at nearly $141 million. GFL Environmental (CA:GFL) CEO and founder Patrick Dovigi earned $43.4 million.

If Staffieri’s pay in 2022 had been earned in 2021, he would have been the third-highest-paid CEO in Canada.

South of the border, the highest-paid U.S. CEO in 2021 was Jeff Green, head of The Trade Desk (US:TTD). He earned a whopping US$834 million. If Staffieri had worked for one of the Russell 3000 companies in 2021 and made what he did in 2022, he would have been the 189th-highest-paid CEO in the gauge.

Meanwhile, according to Sustainalytics, under Staffieri the communications firm isn’t blazing any new trails by ESG — or environmental, social and governance — metrics. At the last full update on Nov. 4, 2022, Rogers was assessed as “medium risk”; meanwhile, global peers Cellnex Telecom SA (MX:CLNX, US:CLNX) and Telefonica SA (ES:TEF, US:TEF) were both assessed as “low risk.”

If you are a long-time Rogers shareholder, you can’t be happy with the board’s compensation decisions in 2022. That speaks volumes about the company’s stock.

This article originally appeared on Fintel