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Is DXP Enterprises, Inc. (NASDAQ:DXPE) Excessively Paying Its CEO?

Simply Wall St

David Little has been the CEO of DXP Enterprises, Inc. (NASDAQ:DXPE) since 1996. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for DXP Enterprises

How Does David Little's Compensation Compare With Similar Sized Companies?

According to our data, DXP Enterprises, Inc. has a market capitalization of US$569m, and pays its CEO total annual compensation worth US$2.1m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$598k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.9m.

So David Little 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, below, how CEO compensation at DXP Enterprises has changed over time.

NasdaqGS:DXPE CEO Compensation, August 13th 2019

Is DXP Enterprises, Inc. Growing?

On average over the last three years, DXP Enterprises, Inc. has grown earnings per share (EPS) by 87% each year (using a line of best fit). It achieved revenue growth of 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has DXP Enterprises, Inc. Been A Good Investment?

With a total shareholder return of 8.7% over three years, DXP Enterprises, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

David Little is paid around what is normal the leaders of comparable size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying DXP Enterprises shares with their own money (free access).

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.

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 editorial-team@simplywallst.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.