Does ABM Industries Incorporated's (NYSE:ABM) CEO Pay Reflect Performance?
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In 2015 Scott Salmirs was appointed CEO of ABM Industries Incorporated (NYSE:ABM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for ABM Industries
How Does Scott Salmirs's Compensation Compare With Similar Sized Companies?
According to our data, ABM Industries Incorporated has a market capitalization of US$2.7b, and pays its CEO total annual compensation worth US$6.0m. (This is based on the year to October 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$975k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.2m.
So Scott Salmirs 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.
You can see a visual representation of the CEO compensation at ABM Industries, below.
Is ABM Industries Incorporated Growing?
On average over the last three years, ABM Industries Incorporated has grown earnings per share (EPS) by 6.1% each year (using a line of best fit). In the last year, its revenue is up 8.2%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has ABM Industries Incorporated Been A Good Investment?
ABM Industries Incorporated has served shareholders reasonably well, with a total return of 17% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Scott Salmirs is paid around what is normal the leaders of comparable size companies.
We think many would like to see better growth. But we don't think the CEO compensation is a problem. Whatever your view on compensation, you might want to check if insiders are buying or selling ABM Industries shares (free trial).
If you want to buy a stock that is better than ABM Industries, this free list of high return, low debt companies is a great place to look.
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 editorial-team@simplywallst.com. 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.
