Ron Kramer has been the CEO of Griffon Corporation (NYSE:GFF) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Griffon pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Ron Kramer Compare With Other Companies In The Industry?
According to our data, Griffon Corporation has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$12m over the year to September 2019. That's a notable decrease of 19% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$2.7m. This suggests that Ron Kramer is paid more than the median for the industry. What's more, Ron Kramer holds US$56m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. It's interesting to note that Griffon allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Griffon Corporation's Growth
Griffon Corporation's earnings per share (EPS) grew 77% per year over the last three years. It achieved revenue growth of 6.4% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Griffon Corporation Been A Good Investment?
Most shareholders would probably be pleased with Griffon Corporation for providing a total return of 35% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Griffon pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Ron's performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Griffon (1 is a bit concerning!) that you should be aware of before investing here.
Important note: Griffon is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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