Blake Moret became the CEO of Rockwell Automation, Inc. (NYSE:ROK) in 2016. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Blake Moret's Compensation Compare With Similar Sized Companies?
Our data indicates that Rockwell Automation, Inc. is worth US$18b, and total annual CEO compensation was reported as US$12m for the year to September 2019. Notably, that's an increase of 27% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$12m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Rockwell Automation stands. On a sector level, around 25% of total compensation represents salary and 75% is other remuneration. It's interesting to note that Rockwell Automation allocates a smaller portion of compensation to salary in comparison to the broader industry.
So Blake Moret receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at Rockwell Automation has changed from year to year.
Is Rockwell Automation, Inc. Growing?
On average over the last three years, Rockwell Automation, Inc. has seen earnings per share (EPS) move in a favourable direction by 13% each year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Rockwell Automation, Inc. Been A Good Investment?
Rockwell Automation, Inc. has generated a total shareholder return of 5.9% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Blake Moret is paid around what is normal for the leaders of larger companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. Looking into other areas, we've picked out 2 warning signs for Rockwell Automation that investors should think about before committing capital to this stock.
If you want to buy a stock that is better than Rockwell Automation, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.