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In 2015 S. Dunston was appointed CEO of American Woodmark Corporation (NASDAQ:AMWD). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does S. Dunston’s Compensation Compare With Similar Sized Companies?
Our data indicates that American Woodmark Corporation is worth US$1.3b, and total annual CEO compensation is US$1.4m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$640k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at American Woodmark has changed from year to year.
Is American Woodmark Corporation Growing?
American Woodmark Corporation has increased its earnings per share (EPS) by an average of 3.5% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 47%.
It’s hard to interpret the strong revenue growth as anything other than a positive. And in that context, the modest EPS improvement certainly isn’t shabby. I wouldn’t say this is necessarily top notch growth, but it is certainly promising. Shareholders might be interested in this free visualization of analyst forecasts.
Has American Woodmark Corporation Been A Good Investment?
American Woodmark Corporation has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like American Woodmark Corporation pays its CEO less than similar sized companies.
S. Dunston receives relatively low remuneration compared to similar sized companies. But the company isn’t exactly firing on all cylinders, from my perspective. But on this analysis I see no issue with the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at American Woodmark.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.