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Tom Burke has been the CEO of Modine Manufacturing Company (NYSE:MOD) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Burke's Compensation Compare With Similar Sized Companies?
According to our data, Modine Manufacturing Company has a market capitalization of US$678m, and pays its CEO total annual compensation worth US$4.7m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at US$924k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
Thus we can conclude that Tom Burke receives more in total compensation than the median of a group of companies in the same market, and of similar size to Modine Manufacturing Company. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Modine Manufacturing, below.
Is Modine Manufacturing Company Growing?
Over the last three years Modine Manufacturing Company has grown its earnings per share (EPS) by an average of 79% per year (using a line of best fit). Its revenue is up 5.2% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Modine Manufacturing Company Been A Good Investment?
Modine Manufacturing Company has served shareholders reasonably well, with a total return of 32% over three years. 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.
We examined the amount Modine Manufacturing Company pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Modine Manufacturing shares (free trial).
If you want to buy a stock that is better than Modine Manufacturing, 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 firstname.lastname@example.org. 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.