It's Unlikely That Griffon Corporation's (NYSE:GFF) CEO Will See A Huge Pay Rise This Year
Griffon's Annual General Meeting to take place on 15th of March
Total pay for CEO Ron Kramer includes US$1.18m salary
Total compensation is 216% above industry average
Over the past three years, Griffon's EPS fell by 66% and over the past three years, the total shareholder return was 283%
CEO Ron Kramer has done a decent job of delivering relatively good performance at Griffon Corporation (NYSE:GFF) recently. As shareholders go into the upcoming AGM on 15th of March, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
See our latest analysis for Griffon
Comparing Griffon Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Griffon Corporation has a market capitalization of US$2.1b, and reported total annual CEO compensation of US$14m for the year to September 2022. That's a notable decrease of 27% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
For comparison, other companies in the American Building industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.5m. Accordingly, our analysis reveals that Griffon Corporation pays Ron Kramer north of the industry median. What's more, Ron Kramer holds US$131m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. It's interesting to note that Griffon allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Griffon Corporation's Growth
Griffon Corporation has reduced its earnings per share by 66% a year over the last three years. Its revenue is up 25% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Griffon Corporation Been A Good Investment?
We think that the total shareholder return of 283%, over three years, would leave most Griffon Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Griffon (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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