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Is Tootsie Roll Industries, Inc.'s (NYSE:TR) CEO Overpaid Relative To Its Peers?

Simply Wall St

Ellen Gordon became the CEO of Tootsie Roll Industries, Inc. (NYSE:TR) in 2015. 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. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Tootsie Roll Industries

How Does Ellen Gordon's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Tootsie Roll Industries, Inc. has a market cap of US$2.3b, and is paying total annual CEO compensation of US$5.1m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$999k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.

That means Ellen Gordon receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Tootsie Roll Industries has changed from year to year.

NYSE:TR CEO Compensation, August 6th 2019
NYSE:TR CEO Compensation, August 6th 2019

Is Tootsie Roll Industries, Inc. Growing?

Over the last three years Tootsie Roll Industries, Inc. has grown its earnings per share (EPS) by an average of 1.0% per year (using a line of best fit). In the last year, its revenue changed by just 0.5%.

I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Tootsie Roll Industries, Inc. Been A Good Investment?

With a total shareholder return of 7.8% over three years, Tootsie Roll Industries, Inc. has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Ellen Gordon is paid around the same as most CEOs of similar size companies.

We think many would like to see better growth. While the CEO may not be underpaid, we don't think the pay is too generous either. Shareholders may want to check for free if Tootsie Roll Industries insiders are buying or selling shares.

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

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.

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. Thank you for reading.