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In 1993 John McConnell was appointed CEO of Worthington Industries, Inc. (NYSE:WOR). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does John McConnell's Compensation Compare With Similar Sized Companies?
Our data indicates that Worthington Industries, Inc. is worth US$2.1b, and total annual CEO compensation is US$4.4m. (This number is for the twelve months until May 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$661k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
That means John McConnell receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Worthington Industries has changed from year to year.
Is Worthington Industries, Inc. Growing?
Worthington Industries, Inc. has increased its earnings per share (EPS) by an average of 8.7% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 13%.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.
Has Worthington Industries, Inc. Been A Good Investment?
With a three year total loss of 0.6%, Worthington Industries, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for John McConnell is close enough to the median pay for a CEO of a similar sized company .
The company cannot boast particularly strong per share growth. And we think the shareholder returns - over three years - have been underwhelming. So it would take a bold person to suggest the pay is too modest. Shareholders may want to check for free if Worthington Industries insiders are buying or selling shares.
Important note: Worthington Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 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. Thank you for reading.