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Why Raven Industries, Inc.'s (NASDAQ:RAVN) CEO Pay Matters To You

Simply Wall St
·3 mins read

In 2010 Dan Rykhus was appointed CEO of Raven Industries, Inc. (NASDAQ:RAVN). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 Raven Industries

How Does Dan Rykhus's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Raven Industries, Inc. has a market cap of US$1.1b, and reported total annual CEO compensation of US$2.7m for the year to January 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$649k. 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$400m to US$1.6b, and the median CEO total compensation was US$2.5m.

So Dan Rykhus 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.

You can see a visual representation of the CEO compensation at Raven Industries, below.

NasdaqGS:RAVN CEO Compensation, February 18th 2020
NasdaqGS:RAVN CEO Compensation, February 18th 2020

Is Raven Industries, Inc. Growing?

Raven Industries, Inc. has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). It saw its revenue drop 7.2% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has Raven Industries, Inc. Been A Good Investment?

Raven Industries, Inc. has served shareholders reasonably well, with a total return of 10% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Remuneration for Dan Rykhus is close enough to the median pay for a CEO of a similar sized company .

The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. Shareholders may want to check for free if Raven Industries insiders are buying or selling shares.

Important note: Raven Industries 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.