Does Martin Marietta Materials, Inc.’s (NYSE:MLM) CEO Salary Reflect Performance?

Ward Nye has been the CEO of Martin Marietta Materials, Inc. (NYSE:MLM) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Martin Marietta Materials

How Does Ward Nye’s Compensation Compare With Similar Sized Companies?

According to our data, Martin Marietta Materials, Inc. has a market capitalization of US$16b, and paid its CEO total annual compensation worth US$8.5m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).

So Ward Nye receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 Martin Marietta Materials has changed from year to year.

NYSE:MLM CEO Compensation, February 3rd 2020
NYSE:MLM CEO Compensation, February 3rd 2020

Is Martin Marietta Materials, Inc. Growing?

Martin Marietta Materials, Inc. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has Martin Marietta Materials, Inc. Been A Good Investment?

With a total shareholder return of 17% over three years, Martin Marietta Materials, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Ward Nye is paid around the same as most CEOs of large companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. So you may want to check if insiders are buying Martin Marietta Materials shares with their own money (free access).

Important note: Martin Marietta Materials 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 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.