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Is Martin Marietta Materials, Inc.'s (NYSE:MLM) CEO Pay Justified?

Simply Wall St

In 2010 Ward Nye was appointed CEO of Martin Marietta Materials, Inc. (NYSE:MLM). This analysis aims first to contrast CEO compensation with other large 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Martin Marietta Materials

How Does Ward Nye's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Martin Marietta Materials, Inc. has a market cap of US$14b, and is paying total annual CEO compensation of US$8.5m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Ward Nye 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 a visual representation of the CEO compensation at Martin Marietta Materials, below.

NYSE:MLM CEO Compensation, July 22nd 2019

Is Martin Marietta Materials, Inc. Growing?

Martin Marietta Materials, Inc. has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Martin Marietta Materials, Inc. Been A Good Investment?

Martin Marietta Materials, Inc. has served shareholders reasonably well, with a total return of 16% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Remuneration for Ward Nye is close enough to the median pay for a CEO of a large company .

The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Martin Marietta Materials (free visualization of insider trades).

If you want to buy a stock that is better than Martin Marietta Materials, 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 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.