In 2016 Roger Newport was appointed CEO of AK Steel Holding Corporation (NYSE:AKS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Roger Newport's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that AK Steel Holding Corporation has a market cap of US$816m, and reported total annual CEO compensation of US$12m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$950k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.6m.
It would therefore appear that AK Steel Holding Corporation pays Roger Newport more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at AK Steel Holding, below.
Is AK Steel Holding Corporation Growing?
Over the last three years AK Steel Holding Corporation has grown its earnings per share (EPS) by an average of 49% per year (using a line of best fit). Revenue was pretty flat on last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has AK Steel Holding Corporation Been A Good Investment?
Since shareholders would have lost about 68% over three years, some AK Steel Holding Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by AK Steel Holding Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if AK Steel Holding insiders are buying or selling shares.
If you want to buy a stock that is better than AK Steel Holding, this free list of high return, low debt companies is a great place to look.
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