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Is Steel Dynamics, Inc.’s (NASDAQ:STLD) CEO Pay Justified?

Thomas Auclair

Mark Millett has been the CEO of Steel Dynamics, Inc. (NASDAQ:STLD) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Steel Dynamics

How Does Mark Millett’s Compensation Compare With Similar Sized Companies?

Our data indicates that Steel Dynamics, Inc. is worth US$6.9b, and total annual CEO compensation is US$8.8m. (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$1.0m. 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$7.1m.

So Mark Millett 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 a visual representation of the CEO compensation at Steel Dynamics, below.

NasdaqGS:STLD CEO Compensation January 1st 19

Is Steel Dynamics, Inc. Growing?

On average over the last three years, Steel Dynamics, Inc. has grown earnings per share (EPS) by 92% each year. Its revenue is up 24% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Steel Dynamics, Inc. Been A Good Investment?

I think that the total shareholder return of 77%, over three years, would leave most Steel Dynamics, Inc. shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

Remuneration for Mark Millett is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Steel Dynamics.

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of 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.