U.S. markets closed
  • S&P 500

    3,841.94
    +73.47 (+1.95%)
     
  • Dow 30

    31,496.30
    +572.20 (+1.85%)
     
  • Nasdaq

    12,920.15
    +196.65 (+1.55%)
     
  • Russell 2000

    2,192.21
    +45.29 (+2.11%)
     
  • Crude Oil

    66.28
    +0.19 (+0.29%)
     
  • Gold

    1,698.20
    -0.30 (-0.02%)
     
  • Silver

    25.30
    +0.01 (+0.03%)
     
  • EUR/USD

    1.1922
    -0.0057 (-0.48%)
     
  • 10-Yr Bond

    1.5540
    +0.0040 (+0.26%)
     
  • GBP/USD

    1.3835
    -0.0059 (-0.43%)
     
  • USD/JPY

    108.3620
    +0.3860 (+0.36%)
     
  • BTC-USD

    50,292.62
    +1,744.25 (+3.59%)
     
  • CMC Crypto 200

    982.93
    +39.75 (+4.21%)
     
  • FTSE 100

    6,630.52
    -20.36 (-0.31%)
     
  • Nikkei 225

    28,864.32
    -65.78 (-0.23%)
     

Our View On WD-40's (NASDAQ:WDFC) CEO Pay

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Garry Ridge has been the CEO of WD-40 Company (NASDAQ:WDFC) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether WD-40 pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for WD-40

Comparing WD-40 Company's CEO Compensation With the industry

Our data indicates that WD-40 Company has a market capitalization of US$3.6b, and total annual CEO compensation was reported as US$2.9m for the year to August 2020. That's a slight decrease of 5.6% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$675k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$4.9m. That is to say, Garry Ridge is paid under the industry median. What's more, Garry Ridge holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$675k

US$662k

23%

Other

US$2.2m

US$2.4m

77%

Total Compensation

US$2.9m

US$3.1m

100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. According to our research, WD-40 has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at WD-40 Company's Growth Numbers

Over the past three years, WD-40 Company has seen its earnings per share (EPS) grow by 5.7% per year. In the last year, its revenue is down 3.5%.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has WD-40 Company Been A Good Investment?

Boasting a total shareholder return of 131% over three years, WD-40 Company has done well by shareholders. 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.

To Conclude...

As previously discussed, Garry is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for WD-40 that investors should think about before committing capital to this 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.

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. 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.

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