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In 1994 Bill Furman was appointed CEO of The Greenbrier Companies, Inc. (NYSE:GBX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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 Bill Furman's Compensation Compare With Similar Sized Companies?
According to our data, The Greenbrier Companies, Inc. has a market capitalization of US$1b, and pays its CEO total annual compensation worth US$7.5m. (This is based on the year to August 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$950k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
As you can see, Bill Furman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean The Greenbrier Companies, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Greenbrier Companies has changed over time.
Is The Greenbrier Companies, Inc. Growing?
On average over the last three years, The Greenbrier Companies, Inc. has shrunk earnings per share by 22% each year (measured with a line of best fit). It achieved revenue growth of 16% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Greenbrier Companies, Inc. Been A Good Investment?
With a total shareholder return of 11% over three years, The Greenbrier Companies, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at The Greenbrier Companies, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Greenbrier Companies (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.