Keith Allman has been the CEO of Masco Corporation (NYSE:MAS) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Keith Allman Compare With Other Companies In The Industry?
Our data indicates that Masco Corporation has a market capitalization of US$15b, and total annual CEO compensation was reported as US$8.7m for the year to December 2019. We note that's a decrease of 26% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$8.1m. This suggests that Masco remunerates its CEO largely in line with the industry average. Moreover, Keith Allman also holds US$21m worth of Masco stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that Masco allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Masco Corporation's Growth Numbers
Masco Corporation has seen its earnings per share (EPS) increase by 13% a year over the past three years. Its revenue is up 8.6% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Masco Corporation Been A Good Investment?
Boasting a total shareholder return of 64% over three years, Masco Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, Masco Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Keith is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Masco that investors should look into moving forward.
Important note: Masco is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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