In 2014 Robert Graham was appointed CEO of NL Industries, Inc. (NYSE:NL). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Robert Graham's Compensation Compare With Similar Sized Companies?
Our data indicates that NL Industries, Inc. is worth US$195m, and total annual CEO compensation is US$4.9m. (This is based on the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$4.9m. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.2m.
It would therefore appear that NL Industries, Inc. pays Robert Graham more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at NL Industries has changed from year to year.
Is NL Industries, Inc. Growing?
NL Industries, Inc. has increased its earnings per share (EPS) by an average of 6.6% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.5%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has NL Industries, Inc. Been A Good Investment?
I think that the total shareholder return of 37%, over three years, would leave most NL Industries, Inc. shareholders smiling. 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.
We compared total CEO remuneration at NL Industries, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at NL Industries.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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