Mike Covey became the CEO of PotlatchDeltic Corporation (NASDAQ:PCH) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether PotlatchDeltic pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing PotlatchDeltic Corporation's CEO Compensation With the industry
According to our data, PotlatchDeltic Corporation has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$4.6m over the year to December 2019. That's a slight decrease of 6.3% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$891k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.3m. From this we gather that Mike Covey is paid around the median for CEOs in the industry. Moreover, Mike Covey also holds US$7.8m worth of PotlatchDeltic stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. According to our research, PotlatchDeltic has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at PotlatchDeltic Corporation's Growth Numbers
Over the last three years, PotlatchDeltic Corporation has shrunk its earnings per share by 49% per year. Its revenue is down 9.2% over the previous year.
The decline in earnings is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has PotlatchDeltic Corporation Been A Good Investment?
PotlatchDeltic Corporation has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, PotlatchDeltic Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. According to our analysis, PotlatchDeltic is suffering from uninspiring earnings growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is largely in line with the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 1 which is potentially serious) in PotlatchDeltic we think you should know about.
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 firstname.lastname@example.org.