George Freeman became the CEO of Universal Corporation (NYSE:UVV) in 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does George Freeman’s Compensation Compare With Similar Sized Companies?
According to our data, Universal Corporation has a market capitalization of US$1.6b, and pays its CEO total annual compensation worth US$3.7m. (This is based on the year to 2018). While we always look at total compensation first, we note that the salary component is less, at US$900k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.
So George Freeman 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 Universal, below.
Is Universal Corporation Growing?
Over the last three years Universal Corporation has shrunk its earnings per share by an average of 8.0% per year. Its revenue is up 4.2% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
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 Universal Corporation Been A Good Investment?
Universal Corporation has served shareholders reasonably well, with a total return of 27% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
George Freeman is paid around what is normal the leaders of comparable size companies.
We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We do not think the CEO pay is a problem, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Universal shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past 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 firstname.lastname@example.org.