U.S. Markets closed

Is HD Supply Holdings, Inc.'s (NASDAQ:HDS) CEO Being Overpaid?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Joe DeAngelo has been the CEO of HD Supply Holdings, Inc. (NASDAQ:HDS) since 2005. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for HD Supply Holdings

How Does Joe DeAngelo's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that HD Supply Holdings, Inc. has a market cap of US$6.8b, and is paying total annual CEO compensation of US$7.5m. (This number is for the twelve months until February 2019). That's a notable increase of 17% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.

So Joe DeAngelo is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at HD Supply Holdings has changed from year to year.

NasdaqGS:HDS CEO Compensation, July 8th 2019

Is HD Supply Holdings, Inc. Growing?

On average over the last three years, HD Supply Holdings, Inc. has shrunk earnings per share by 44% each year (measured with a line of best fit). Its revenue is up 16% over last year.

Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has HD Supply Holdings, Inc. Been A Good Investment?

HD Supply Holdings, Inc. has served shareholders reasonably well, with a total return of 11% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Joe DeAngelo is paid around the same as most CEOs of similar size companies.

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. Shareholders might not love the fact the CEO remuneration is up on last year. We're not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. So you may want to check if insiders are buying HD Supply Holdings shares with their own money (free access).

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 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.