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Is Werner Enterprises, Inc.'s (NASDAQ:WERN) CEO Overpaid Relative To Its Peers?

Simply Wall St

Derek Leathers became the CEO of Werner Enterprises, Inc. (NASDAQ:WERN) in 2016. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Werner Enterprises

How Does Derek Leathers's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Werner Enterprises, Inc. has a market cap of US$2.5b, and reported total annual CEO compensation of US$4.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$722k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

So Derek Leathers is paid around the average of 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.

The graphic below shows how CEO compensation at Werner Enterprises has changed from year to year.

NasdaqGS:WERN CEO Compensation, December 24th 2019

Is Werner Enterprises, Inc. Growing?

Werner Enterprises, Inc. has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.6%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.

Has Werner Enterprises, Inc. Been A Good Investment?

I think that the total shareholder return of 51%, over three years, would leave most Werner Enterprises, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Derek Leathers is paid around the same as most CEOs of similar size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Werner Enterprises (free visualization of insider trades).

Important note: Werner Enterprises 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.

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.

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. Thank you for reading.