In 1997 Keith Walters was appointed CEO of Ennis, Inc. (NYSE:EBF). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Keith Walters's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Ennis, Inc. has a market cap of US$521m, and reported total annual CEO compensation of US$3.8m for the year to February 2019. While we always look at total compensation first, we note that the salary component is less, at US$943k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
It would therefore appear that Ennis, Inc. pays Keith Walters more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Ennis has changed from year to year.
Is Ennis, Inc. Growing?
On average over the last three years, Ennis, Inc. has grown earnings per share (EPS) by 14% each year (using a line of best fit). In the last year, its revenue is up 14%.
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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Ennis, Inc. Been A Good Investment?
Boasting a total shareholder return of 47% over three years, Ennis, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at Ennis, Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ennis (free visualization of insider trades).
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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