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In 2014 Benno Dorer was appointed CEO of The Clorox Company (NYSE:CLX). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Benno Dorer's Compensation Compare With Similar Sized Companies?
Our data indicates that The Clorox Company is worth US$20b, and total annual CEO compensation is US$8.1m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued 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.
So Benno Dorer receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Clorox has changed from year to year.
Is The Clorox Company Growing?
The Clorox Company has increased its earnings per share (EPS) by an average of 9.4% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 3.3%.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Clorox Company Been A Good Investment?
The Clorox Company has served shareholders reasonably well, with a total return of 27% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Benno Dorer is close enough to the median pay for a CEO of a large company .
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While the CEO may not be underpaid, we don't think the pay is too generous either. So you may want to check if insiders are buying Clorox shares with their own money (free access).
Important note: Clorox may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 firstname.lastname@example.org. 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.