Neil Schrimsher has been the CEO of Applied Industrial Technologies, Inc. (NYSE:AIT) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Neil Schrimsher's Compensation Compare With Similar Sized Companies?
According to our data, Applied Industrial Technologies, Inc. has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$4.5m over the year to June 2019. That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.
So Neil Schrimsher is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Applied Industrial Technologies, below.
Is Applied Industrial Technologies, Inc. Growing?
On average over the last three years, Applied Industrial Technologies, Inc. has grown earnings per share (EPS) by 37% each year (using a line of best fit). In the last year, its revenue is up 13%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Applied Industrial Technologies, Inc. Been A Good Investment?
With a total shareholder return of 19% over three years, Applied Industrial Technologies, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Neil Schrimsher is paid around what is normal the leaders of comparable size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Applied Industrial Technologies.
Important note: Applied Industrial Technologies may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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