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Is Trinity Industries, Inc.'s (NYSE:TRN) CEO Pay Justified?

Simply Wall St

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In 1999 Tim Wallace was appointed CEO of Trinity Industries, Inc. (NYSE:TRN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Trinity Industries

How Does Tim Wallace's Compensation Compare With Similar Sized Companies?

Our data indicates that Trinity Industries, Inc. is worth US$2.6b, and total annual CEO compensation is US$8.1m. (This is based on the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. 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$5.3m.

Thus we can conclude that Tim Wallace receives more in total compensation than the median of a group of companies in the same market, and of similar size to Trinity Industries, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Trinity Industries, below.

NYSE:TRN CEO Compensation, June 7th 2019

Is Trinity Industries, Inc. Growing?

Trinity Industries, Inc. has reduced its earnings per share by an average of 19% a year, over the last three years (measured with a line of best fit). Its revenue is up 26% over last year.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Trinity Industries, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Trinity Industries, Inc. for providing a total return of 58% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Trinity Industries, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Trinity Industries shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.