In 1997, Daniel Jaffee was appointed CEO of Oil-Dri Corporation of America (NYSE:ODC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Daniel Jaffee's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Oil-Dri Corporation of America has a market cap of US$258m, and reported total annual CEO compensation of US$6.3m for the year to July 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$721k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.4m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Oil-Dri Corporation of America stands. On a sector level, around 12% of total compensation represents salary and 88% is other remuneration. So it seems like there isn't a significant difference between Oil-Dri Corporation of America and the broader market, in terms of salary allocation in the overall compensation package.
As you can see, Daniel Jaffee is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Oil-Dri Corporation of America is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at Oil-Dri Corporation of America has changed over time.
Is Oil-Dri Corporation of America Growing?
Over the last three years Oil-Dri Corporation of America has seen earnings per share (EPS) move in a positive direction by an average of 10% per year (using a line of best fit). It achieved revenue growth of 6.2% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Oil-Dri Corporation of America Been A Good Investment?
With a total shareholder return of 8.0% over three years, Oil-Dri Corporation of America has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Oil-Dri Corporation of America, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Shareholders may want to check for free if Oil-Dri Corporation of America insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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