Dick Robinson has been the CEO of Scholastic Corporation (NASDAQ:SCHL) since 1975. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Dick Robinson's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Scholastic Corporation has a market cap of US$1.3b, and is paying total annual CEO compensation of US$4.3m. (This figure is for the year to May 2018). While we always look at total compensation first, we note that the salary component is less, at US$970k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.0m.
So Dick Robinson receives a similar amount to the median CEO pay, amongst 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 Scholastic has changed over time.
Is Scholastic Corporation Growing?
On average over the last three years, Scholastic Corporation has shrunk earnings per share by 43% each year (measured with a line of best fit). In the last year, its revenue is up 2.9%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Scholastic Corporation Been A Good Investment?
With a total shareholder return of 2.6% over three years, Scholastic Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Remuneration for Dick Robinson is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Whatever your view on compensation, you might want to check if insiders are buying or selling Scholastic shares (free trial).
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.
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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.