Don Meij became the CEO of Domino's Pizza Enterprises Limited (ASX:DMP) in 2001. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Don Meij's Compensation Compare With Similar Sized Companies?
Our data indicates that Domino's Pizza Enterprises Limited is worth AU$4.4b, and total annual CEO compensation was reported as AU$777k for the year to July 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$1.1m. We looked at a group of companies with market capitalizations from AU$2.9b to AU$9.3b, and the median CEO total compensation was AU$3.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Domino's Pizza Enterprises has changed over time.
Is Domino's Pizza Enterprises Limited Growing?
Domino's Pizza Enterprises Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 24%.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Domino's Pizza Enterprises Limited Been A Good Investment?
Since shareholders would have lost about 18% over three years, some Domino's Pizza Enterprises Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Domino's Pizza Enterprises Limited is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we would not say that Don Meij is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. So you may want to check if insiders are buying Domino's Pizza Enterprises shares with their own money (free access).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.