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In 2009 Todd Cleveland was appointed CEO of Patrick Industries, Inc. (NASDAQ:PATK). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Todd Cleveland's Compensation Compare With Similar Sized Companies?
According to our data, Patrick Industries, Inc. has a market capitalization of US$1.2b, and pays its CEO total annual compensation worth US$6.9m. (This is based on the year to December 2018). That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$690k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.3m.
Thus we can conclude that Todd Cleveland receives more in total compensation than the median of a group of companies in the same market, and of similar size to Patrick Industries, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Patrick Industries has changed from year to year.
Is Patrick Industries, Inc. Growing?
On average over the last three years, Patrick Industries, Inc. has grown earnings per share (EPS) by 32% each year (using a line of best fit). It achieved revenue growth of 26% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has Patrick Industries, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Patrick Industries, Inc. for providing a total return of 63% 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.
We compared the total CEO remuneration paid by Patrick Industries, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Patrick Industries (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.