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Should You Worry About Armstrong World Industries, Inc.'s (NYSE:AWI) CEO Salary Level?

Simply Wall St

Vic Grizzle has been the CEO of Armstrong World Industries, Inc. (NYSE:AWI) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Armstrong World Industries

How Does Vic Grizzle's Compensation Compare With Similar Sized Companies?

According to our data, Armstrong World Industries, Inc. has a market capitalization of US$4.6b, and pays its CEO total annual compensation worth US$4.7m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$744k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.

That means Vic Grizzle receives fairly typical remuneration for the CEO of a company that size. 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 Armstrong World Industries has changed from year to year.

NYSE:AWI CEO Compensation, July 30th 2019

Is Armstrong World Industries, Inc. Growing?

Over the last three years Armstrong World Industries, Inc. has grown its earnings per share (EPS) by an average of 51% per year (using a line of best fit). Its revenue is up 9.9% over last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Armstrong World Industries, Inc. Been A Good Investment?

I think that the total shareholder return of 125%, over three years, would leave most Armstrong World Industries, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Armstrong World Industries.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.