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Does Summit Materials Inc’s (NYSE:SUM) CEO Pay Reflect Performance?

Tom Hill became the CEO of Summit Materials Inc (NYSE:SUM) in 2014. 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 – 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.

See our latest analysis for Summit Materials

How Does Tom Hill’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Summit Materials Inc has a market cap of US$1.7b, and is paying total annual CEO compensation of US$4m. That’s less than last year. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3m.

So Tom Hill is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Summit Materials, below.

NYSE:SUM CEO Compensation November 7th 18

Is Summit Materials Inc Growing?

On average over the last three years, Summit Materials Inc has grown earnings per share (EPS) by 64% each year. Its revenue is up 16% over last year.

This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Summit Materials Inc Been A Good Investment?

Since shareholders would have lost about 39% over three years, some Summit Materials Inc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Remuneration for Tom Hill is close enough to the median pay for a CEO of a similar sized company .

We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Summit Materials Inc shares (free trial).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

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 editorial-team@simplywallst.com.