Is The Sherwin-Williams Company’s (NYSE:SHW) CEO Paid Enough Relative To Peers?
John Morikis became the CEO of The Sherwin-Williams Company (NYSE:SHW) in 2016. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Sherwin-Williams
How Does John Morikis’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Sherwin-Williams Company is worth US$39b, and total annual CEO compensation is US$14m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So John Morikis 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.
You can see, below, how CEO compensation at Sherwin-Williams has changed over time.
Is The Sherwin-Williams Company Growing?
On average over the last three years, The Sherwin-Williams Company has grown earnings per share (EPS) by 24% each year. It achieved revenue growth of 27% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has The Sherwin-Williams Company Been A Good Investment?
I think that the total shareholder return of 57%, over three years, would leave most The Sherwin-Williams Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
John Morikis is paid around what is normal the leaders of larger companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sherwin-Williams (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
