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George Freeman has been the CEO of Universal Corporation (NYSE:UVV) since 2008. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does George Freeman's Compensation Compare With Similar Sized Companies?
Our data indicates that Universal Corporation is worth US$1.5b, and total annual CEO compensation is US$3.7m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at US$900k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.
So George Freeman 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, below, how CEO compensation at Universal has changed over time.
Is Universal Corporation Growing?
Universal Corporation has increased its earnings per share (EPS) by an average of 5.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.5%.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Universal Corporation Been A Good Investment?
Universal Corporation has served shareholders reasonably well, with a total return of 22% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
George Freeman is paid around the same as most CEOs of similar size companies.
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Shareholders may want to check for free if Universal insiders are buying or selling shares.
Important note: Universal may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.