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Scott Farmer has been the CEO of Cintas Corporation (NASDAQ:CTAS) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. 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 Scott Farmer's Compensation Compare With Similar Sized Companies?
According to our data, Cintas Corporation has a market capitalization of US$24b, and pays its CEO total annual compensation worth US$9.8m. (This figure is for the year to May 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Scott Farmer receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Cintas has changed over time.
Is Cintas Corporation Growing?
Over the last three years Cintas Corporation has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). It achieved revenue growth of 6.8% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cintas Corporation Been A Good Investment?
Boasting a total shareholder return of 154% over three years, Cintas Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Scott Farmer is paid around what is normal the leaders of larger companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if Cintas insiders are buying or selling shares.
If you want to buy a stock that is better than Cintas, this free list of high return, low debt companies is a great place to look.
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 email@example.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.