How Much Does Winmark's (NASDAQ:WINA) CEO Make?
Brett Heffes became the CEO of Winmark Corporation (NASDAQ:WINA) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Winmark
Comparing Winmark Corporation's CEO Compensation With the industry
According to our data, Winmark Corporation has a market capitalization of US$660m, and paid its CEO total annual compensation worth US$882k over the year to December 2019. That's a slightly lower by 7.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$325k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$3.0m. In other words, Winmark pays its CEO lower than the industry median. What's more, Brett Heffes holds US$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$325k | US$315k | 37% |
Other | US$557k | US$635k | 63% |
Total Compensation | US$882k | US$950k | 100% |
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Winmark is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Winmark Corporation's Growth Numbers
Winmark Corporation's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is down 7.4%.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Winmark Corporation Been A Good Investment?
We think that the total shareholder return of 38%, over three years, would leave most Winmark Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As previously discussed, Brett is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Winmark that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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