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What Can We Learn About Oil-Dri Corporation of America's (NYSE:ODC) CEO Compensation?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Dan Jaffee who has served as CEO of Oil-Dri Corporation of America (NYSE:ODC) since 1997. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Oil-Dri Corporation of America

Comparing Oil-Dri Corporation of America's CEO Compensation With the industry

According to our data, Oil-Dri Corporation of America has a market capitalization of US$270m, and paid its CEO total annual compensation worth US$2.2m over the year to July 2020. That's a notable decrease of 64% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$743k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$470k. This suggests that Dan Jaffee is paid more than the median for the industry. Furthermore, Dan Jaffee directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$743k

US$721k

33%

Other

US$1.5m

US$5.6m

67%

Total Compensation

US$2.2m

US$6.3m

100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Oil-Dri Corporation of America is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Oil-Dri Corporation of America's Growth Numbers

Oil-Dri Corporation of America has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 2.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Oil-Dri Corporation of America Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Oil-Dri Corporation of America are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, Oil-Dri Corporation of America is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Oil-Dri Corporation of America that investors should think about before committing capital to this stock.

Switching gears from Oil-Dri Corporation of America, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.