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Mark Millett became the CEO of Steel Dynamics, Inc. (NASDAQ:STLD) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mark Millett's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Steel Dynamics, Inc. has a market cap of US$7.3b, and is paying total annual CEO compensation of US$10m. (This is based on the year to December 2018). We note that's an increase of 14% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.8m.
As you can see, Mark Millett is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Steel Dynamics, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Steel Dynamics has changed from year to year.
Is Steel Dynamics, Inc. Growing?
On average over the last three years, Steel Dynamics, Inc. has grown earnings per share (EPS) by 73% each year (using a line of best fit). Its revenue is up 23% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Steel Dynamics, Inc. Been A Good Investment?
I think that the total shareholder return of 45%, over three years, would leave most Steel Dynamics, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Steel Dynamics, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Steel Dynamics (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.