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Is Raven Industries, Inc.'s (NASDAQ:RAVN) CEO Paid Enough Relative To Peers?

Simply Wall St

Dan Rykhus has been the CEO of Raven Industries, Inc. (NASDAQ:RAVN) since 2010. 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Raven Industries

How Does Dan Rykhus's Compensation Compare With Similar Sized Companies?

According to our data, Raven Industries, Inc. has a market capitalization of US$1.2b, and pays its CEO total annual compensation worth US$2.7m. (This is based on the year to January 2019). That's just a smallish increase of 5.1% on last year. While we always look at total compensation first, we note that the salary component is less, at US$649k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.

Most shareholders would consider it a positive that Dan Rykhus takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Raven Industries, below.

NasdaqGS:RAVN CEO Compensation, July 23rd 2019
NasdaqGS:RAVN CEO Compensation, July 23rd 2019

Is Raven Industries, Inc. Growing?

Over the last three years Raven Industries, Inc. has grown its earnings per share (EPS) by an average of 50% per year (using a line of best fit). Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Raven Industries, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Raven Industries, Inc. for providing a total return of 92% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Raven Industries, Inc. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Dan Rykhus deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Raven Industries (free visualization of insider trades).

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.

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.