David Hult has been the CEO of Asbury Automotive Group, Inc. (NYSE:ABG) since 2018, 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.
Comparing Asbury Automotive Group, Inc.'s CEO Compensation With the industry
Our data indicates that Asbury Automotive Group, Inc. has a market capitalization of US$2.1b, and total annual CEO compensation was reported as US$5.5m for the year to December 2019. That's a notable increase of 9.5% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$6.7m. From this we gather that David Hult is paid around the median for CEOs in the industry. Furthermore, David Hult directly owns US$6.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Asbury Automotive Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Asbury Automotive Group, Inc.'s Growth Numbers
Asbury Automotive Group, Inc. has seen its earnings per share (EPS) increase by 2.1% a year over the past three years. Its revenue is down 3.3% over the previous year.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Asbury Automotive Group, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Asbury Automotive Group, Inc. for providing a total return of 99% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Asbury Automotive Group pays its CEO in line with similar-sized companies belonging to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. At the same time, shareholder returns have remained strong over the same period. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Asbury Automotive Group that you should be aware of before investing.
Switching gears from Asbury Automotive Group, 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.
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