Karen Colonias became the CEO of Simpson Manufacturing Co., Inc. (NYSE:SSD) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.
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How Does Karen Colonias's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Simpson Manufacturing Co., Inc. has a market cap of US$2.9b, and is paying total annual CEO compensation of US$3.0m. (This figure is for the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$740k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.
Most shareholders would consider it a positive that Karen Colonias takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Simpson Manufacturing has changed over time.
Is Simpson Manufacturing Co., Inc. Growing?
On average over the last three years, Simpson Manufacturing Co., Inc. has grown earnings per share (EPS) by 18% each year (using a line of best fit). It achieved revenue growth of 9.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Simpson Manufacturing Co., Inc. Been A Good Investment?
I think that the total shareholder return of 83%, over three years, would leave most Simpson Manufacturing Co., Inc. shareholders smiling. 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.
Simpson Manufacturing Co., Inc. is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Karen Colonias deserves a raise!
It's not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Simpson Manufacturing (free visualization of insider trades).
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.