In 2006 Anthony Allott was appointed CEO of Silgan Holdings Inc. (NASDAQ:SLGN). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Anthony Allott's Compensation Compare With Similar Sized Companies?
According to our data, Silgan Holdings Inc. has a market capitalization of US$3.3b, and pays its CEO total annual compensation worth US$2.7m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Silgan Holdings has changed from year to year.
Is Silgan Holdings Inc. Growing?
Over the last three years Silgan Holdings Inc. has grown its earnings per share (EPS) by an average of 30% per year (using a line of best fit). In the last year, its revenue is up 8.8%.
This demonstrates that the company has been improving recently. A good result. 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 Silgan Holdings Inc. Been A Good Investment?
Silgan Holdings Inc. has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Silgan Holdings Inc. pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Anthony Allott is overcompensated.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Silgan Holdings shares (free trial).
If you want to buy a stock that is better than Silgan Holdings, this free list of high return, low debt companies is a great place to look.
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