Jim Keane became the CEO of Steelcase Inc. (NYSE:SCS) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Jim Keane’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Steelcase Inc. has a market cap of US$1.7b, and is paying total annual CEO compensation of US$4.7m. (This number is for the twelve months until 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$985k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.6m.
It would therefore appear that Steelcase Inc. pays Jim Keane more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Steelcase, below.
Is Steelcase Inc. Growing?
Over the last three years Steelcase Inc. has shrunk its earnings per share by an average of 14% per year. In the last year, its revenue is up 3.5%.
Sadly for shareholders, earnings per share are actually down, over three years. 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 Steelcase Inc. Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in Steelcase Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Steelcase Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Steelcase (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.