Chris Killoy became the CEO of Sturm, Ruger & Company, Inc. (NYSE:RGR) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Chris Killoy's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sturm, Ruger & Company, Inc. has a market cap of US$880m, and reported total annual CEO compensation of US$2.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.6m.
So Chris Killoy receives a similar amount to the median CEO pay, amongst 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.
You can see a visual representation of the CEO compensation at Sturm Ruger, below.
Is Sturm, Ruger & Company, Inc. Growing?
Over the last three years Sturm, Ruger & Company, Inc. has shrunk its earnings per share by an average of 25% per year (measured with a line of best fit). Its revenue is down 13% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Sturm, Ruger & Company, Inc. Been A Good Investment?
Sturm, Ruger & Company, Inc. has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Chris Killoy is close enough to the median pay for a CEO of a similar sized company .
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sturm Ruger.
If you want to buy a stock that is better than Sturm Ruger, this free list of high return, low debt companies is a great place to look.
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