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Is Oil-Dri Corporation of America (NYSE:ODC) Excessively Paying Its CEO?

Simply Wall St

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In 1997 Daniel Jaffee was appointed CEO of Oil-Dri Corporation of America (NYSE:ODC). First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Oil-Dri of America

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$224m, and is paying total annual CEO compensation of US$1.3m. (This is based on the year to July 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$700k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

So Daniel Jaffee is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Oil-Dri of America has changed over time.

NYSE:ODC CEO Compensation, June 5th 2019

Is Oil-Dri Corporation of America Growing?

On average over the last three years, Oil-Dri Corporation of America has shrunk earnings per share by 25% each year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Oil-Dri Corporation of America Been A Good Investment?

Given the total loss of 3.2% over three years, many shareholders in Oil-Dri Corporation of America are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Daniel Jaffee is paid around what is normal the leaders of comparable size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! Whatever your view on compensation, you might want to check if insiders are buying or selling Oil-Dri of America shares (free trial).

If you want to buy a stock that is better than Oil-Dri of America, this free list of high return, low debt companies is a great place to look.

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 editorial-team@simplywallst.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.