Joe Raver has been the CEO of Hillenbrand, Inc. (NYSE:HI) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
How Does Joe Raver’s Compensation Compare With Similar Sized Companies?
According to our data, Hillenbrand, Inc. has a market capitalization of US$2.4b, and pays its CEO total annual compensation worth US$5.3m. (This number is for the twelve months until 2018). That’s a notable increase of 23% on last year. While we always look at total compensation first, we note that the salary component is less, at US$810k. 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$5.1m.
So Joe Raver is paid around the average of 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.
The graphic below shows how CEO compensation at Hillenbrand has changed from year to year.
Is Hillenbrand, Inc. Growing?
Hillenbrand, Inc. has reduced its earnings per share by an average of 8.0% a year, over the last three years. Its revenue is up 11% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Hillenbrand, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Hillenbrand, Inc. for providing a total return of 59% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Joe Raver is paid around the same as most CEOs of similar size companies.
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hillenbrand (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
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 email@example.com.