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Is The Scotts Miracle-Gro Company's (NYSE:SMG) CEO Being Overpaid?

Simply Wall St

In 2001 Jim Hagedorn was appointed CEO of The Scotts Miracle-Gro Company (NYSE:SMG). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.

Check out our latest analysis for Scotts Miracle-Gro

How Does Jim Hagedorn's Compensation Compare With Similar Sized Companies?

According to our data, The Scotts Miracle-Gro Company has a market capitalization of US$5.7b, and paid its CEO total annual compensation worth US$5.2m over the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.6m.

So Jim Hagedorn receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Scotts Miracle-Gro, below.

NYSE:SMG CEO Compensation, December 16th 2019

Is The Scotts Miracle-Gro Company Growing?

On average over the last three years, The Scotts Miracle-Gro Company has grown earnings per share (EPS) by 18% each year (using a line of best fit). It achieved revenue growth of 18% over the last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has The Scotts Miracle-Gro Company Been A Good Investment?

With a total shareholder return of 15% over three years, The Scotts Miracle-Gro Company shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Jim Hagedorn is paid around the same as most CEOs of similar size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Scotts Miracle-Gro.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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.