Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Bob Martin has been the CEO of Thor Industries, Inc. (NYSE:THO) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bob Martin's Compensation Compare With Similar Sized Companies?
Our data indicates that Thor Industries, Inc. is worth US$3.0b, and total annual CEO compensation is US$15m. (This number is for the twelve months until July 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$750k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.3m.
It would therefore appear that Thor Industries, Inc. pays Bob Martin 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.
The graphic below shows how CEO compensation at Thor Industries has changed from year to year.
Is Thor Industries, Inc. Growing?
Thor Industries, Inc. has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It saw its revenue drop -12% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Thor Industries, Inc. Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Thor Industries, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Thor Industries, Inc. with the amount paid at companies with a similar market capitalization. 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. So you may want to check if insiders are buying Thor Industries shares with their own money (free access).
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.