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Is Graphic Packaging Holding Company's (NYSE:GPK) CEO Overpaid Relative To Its Peers?

Simply Wall St

Mike Doss became the CEO of Graphic Packaging Holding Company (NYSE:GPK) in 2016. 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 - 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.

View our latest analysis for Graphic Packaging Holding

How Does Mike Doss's Compensation Compare With Similar Sized Companies?

Our data indicates that Graphic Packaging Holding Company is worth US$4.2b, and total annual CEO compensation is US$7.3m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. 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.

As you can see, Mike Doss is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Graphic Packaging Holding Company is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Graphic Packaging Holding has changed over time.

NYSE:GPK CEO Compensation, September 16th 2019

Is Graphic Packaging Holding Company Growing?

Over the last three years Graphic Packaging Holding Company has grown its earnings per share (EPS) by an average of 9.6% per year (using a line of best fit). In the last year, its revenue is up 16%.

I would argue that the modest growth in revenue is a notable positive. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Graphic Packaging Holding Company Been A Good Investment?

Graphic Packaging Holding Company has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We examined the amount Graphic Packaging Holding Company pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We generally prefer to see stronger EPS growth, and we're not particularly impressed with the total shareholder return, over the last three years. Considering this, we wouldn't want to see any big pay rises, although we'd stop short of calling the CEO compensation unfair. Shareholders may want to check for free if Graphic Packaging Holding insiders are buying or selling shares.

Important note: Graphic Packaging Holding 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.

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.