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Matt Farrell has been the CEO of Church & Dwight Co., Inc. (NYSE:CHD) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Church & Dwight pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Church & Dwight Co., Inc.'s CEO Compensation With the industry
Our data indicates that Church & Dwight Co., Inc. has a market capitalization of US$21b, and total annual CEO compensation was reported as US$9.0m for the year to December 2019. Notably, that's an increase of 24% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$6.0m. Accordingly, our analysis reveals that Church & Dwight Co., Inc. pays Matt Farrell north of the industry median. Moreover, Matt Farrell also holds US$13m worth of Church & Dwight stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. It's interesting to note that Church & Dwight allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Church & Dwight Co., Inc.'s Growth
Over the past three years, Church & Dwight Co., Inc. has seen its earnings per share (EPS) grow by 21% per year. It achieved revenue growth of 11% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Church & Dwight Co., Inc. Been A Good Investment?
We think that the total shareholder return of 100%, over three years, would leave most Church & Dwight Co., Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we touched on above, Church & Dwight Co., Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Matt's performance.
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 1 warning sign for Church & Dwight that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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