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The Toro Company's (NYSE:TTC) CEO Looks Like They Deserve Their Pay Packet

Key Insights

  • Toro to hold its Annual General Meeting on 21st of March

  • Total pay for CEO Rick Olson includes US$1.09m salary

  • The overall pay is comparable to the industry average

  • Over the past three years, Toro's EPS grew by 20% and over the past three years, the total shareholder return was 103%

We have been pretty impressed with the performance at The Toro Company (NYSE:TTC) recently and CEO Rick Olson deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 21st of March. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Toro

Comparing The Toro Company's CEO Compensation With The Industry

Our data indicates that The Toro Company has a market capitalization of US$12b, and total annual CEO compensation was reported as US$7.3m for the year to October 2022. Notably, that's a decrease of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

In comparison with other companies in the American Machinery industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$10m. This suggests that Toro remunerates its CEO largely in line with the industry average. Moreover, Rick Olson also holds US$3.8m worth of Toro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2022

2021

Proportion (2022)

Salary

US$1.1m

US$1.0m

15%

Other

US$6.2m

US$7.6m

85%

Total Compensation

US$7.3m

US$8.6m

100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Toro is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

The Toro Company's Growth

Over the past three years, The Toro Company has seen its earnings per share (EPS) grow by 20% per year. In the last year, its revenue is up 18%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Toro Company Been A Good Investment?

We think that the total shareholder return of 103%, over three years, would leave most The Toro Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Toro that you should be aware of before investing.

Important note: Toro is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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