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Should You Worry About GATX Corporation's (NYSE:GATX) CEO Pay?

Simply Wall St

Brian Kenney became the CEO of GATX Corporation (NYSE:GATX) in 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for GATX

How Does Brian Kenney's Compensation Compare With Similar Sized Companies?

Our data indicates that GATX Corporation is worth US$2.9b, and total annual CEO compensation was reported as US$5.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$977k. 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.

That means Brian Kenney receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

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

NYSE:GATX CEO Compensation, December 17th 2019

Is GATX Corporation Growing?

Over the last three years, GATX Corporation has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. It achieved revenue growth of 2.7% over the last year.

In the last three years the company has failed to grow earnings per share. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has GATX Corporation Been A Good Investment?

Boasting a total shareholder return of 44% over three years, GATX Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Brian Kenney is paid around the same as most CEOs of similar size companies.

The company isn't growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Whatever your view on compensation, you might want to check if insiders are buying or selling GATX shares (free trial).

If you want to buy a stock that is better than GATX, this free list of high return, low debt companies is a great place to look.

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.