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Is Winmark Corporation's (NASDAQ:WINA) CEO Pay Fair?

Simply Wall St

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Brett Heffes became the CEO of Winmark Corporation (NASDAQ:WINA) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Winmark

How Does Brett Heffes's Compensation Compare With Similar Sized Companies?

According to our data, Winmark Corporation has a market capitalization of US$757m, and pays its CEO total annual compensation worth US$950k. (This number is for the twelve months until December 2018). That's just a smallish increase of 1.4% on last year. While we always look at total compensation first, we note that the salary component is less, at US$315k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.2m.

Most shareholders would consider it a positive that Brett Heffes takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

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

NasdaqGM:WINA CEO Compensation, April 4th 2019

Is Winmark Corporation Growing?

On average over the last three years, Winmark Corporation has grown earnings per share (EPS) by 17% each year (using a line of best fit). Its revenue is up 4.0% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Winmark Corporation Been A Good Investment?

Most shareholders would probably be pleased with Winmark Corporation for providing a total return of 94% over three years. 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.

In Summary...

It appears that Winmark Corporation remunerates its CEO below most similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Brett Heffes deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Winmark shares with their own money (free access).

Important note: Winmark 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.