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Is The Walt Disney Company's (NYSE:DIS) CEO Being Overpaid?

Simply Wall St

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Bob Iger has been the CEO of The Walt Disney Company (NYSE:DIS) since 2005. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for Walt Disney

How Does Bob Iger's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that The Walt Disney Company has a market cap of US$254b, and is paying total annual CEO compensation of US$66m. (This number is for the twelve months until September 2018). While we always look at total compensation first, we note that the salary component is less, at US$2.9m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

As you can see, Bob Iger is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean The Walt Disney Company is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Walt Disney, below.

NYSE:DIS CEO Compensation, June 18th 2019

Is The Walt Disney Company Growing?

On average over the last three years, The Walt Disney Company has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is up 5.0%.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has The Walt Disney Company Been A Good Investment?

Most shareholders would probably be pleased with The Walt Disney Company for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount The Walt Disney Company pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Walt Disney.

Important note: Walt Disney may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.