In 2014 J. Nauman was appointed CEO of Brady Corporation (NYSE:BRC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does J. Nauman’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Brady Corporation has a market cap of US$2.8b, and reported total annual CEO compensation of US$5.2m for the year to July 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$794k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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$4.9m.
That means J. Nauman 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.
You can see a visual representation of the CEO compensation at Brady, below.
Is Brady Corporation Growing?
Over the last three years Brady Corporation has grown its earnings per share (EPS) by an average of 14% per year (using a line of best fit). Its revenue is down 1.9% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Brady Corporation Been A Good Investment?
Most shareholders would probably be pleased with Brady Corporation for providing a total return of 43% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
J. Nauman is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Brady (free visualization of insider trades).
Important note: Brady 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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