Garry Ridge has been the CEO of WD-40 Company (NASDAQ:WDFC) since 1997. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Garry Ridge's Compensation Compare With Similar Sized Companies?
According to our data, WD-40 Company has a market capitalization of US$2.7b, and paid its CEO total annual compensation worth US$3.1m over the year to August 2019. Notably, that's an increase of 27% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$662k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
A first glance this seems like a real positive for shareholders, since Garry Ridge is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at WD-40 has changed over time.
Is WD-40 Company Growing?
Over the last three years WD-40 Company has grown its earnings per share (EPS) by an average of 10% per year (using a line of best fit). It achieved revenue growth of 3.6% over the last year.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has WD-40 Company Been A Good Investment?
I think that the total shareholder return of 81%, over three years, would leave most WD-40 Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
WD-40 Company is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Garry Ridge deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at WD-40.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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