Is International Paper Company’s (NYSE:IP) CEO Being Overpaid?
Mark Sutton became the CEO of International Paper Company (NYSE:IP) in 2014. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. 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 International Paper
How Does Mark Sutton’s Compensation Compare With Similar Sized Companies?
Our data indicates that International Paper Company is worth US$17.8b, and total annual CEO compensation is US$19m. Notably, that’s an increase of 46% over the year before. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m.
Thus we can conclude that Mark Sutton receives more in total compensation than the median of a group of large companies in the same market as International Paper Company. However, this doesn’t necessarily mean the pay is too high. 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 International Paper has changed over time.
Is International Paper Company Growing?
International Paper Company has increased its earnings per share (EPS) by an average of 49% a year, over the last three years 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.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has International Paper Company Been A Good Investment?
International Paper Company has served shareholders reasonably well, with a total return of 15% 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…
We examined the amount International Paper Company pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling International Paper Company (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
