Chris Killoy became the CEO of Sturm, Ruger & Company, Inc. (NYSE:RGR) in 2017. 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. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Chris Killoy’s Compensation Compare With Similar Sized Companies?
According to our data, Sturm, Ruger & Company, Inc. has a market capitalization of US$812m, and paid its CEO total annual compensation worth US$2.1m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$500k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.
So Chris Killoy receives a similar amount to the median CEO pay, amongst the companies we looked at. 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.
You can see a visual representation of the CEO compensation at Sturm Ruger, below.
Is Sturm, Ruger & Company, Inc. Growing?
On average over the last three years, Sturm, Ruger & Company, Inc. has shrunk earnings per share by 25% each year (measured with a line of best fit). In the last year, its revenue is down 13%.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Sturm, Ruger & Company, Inc. Been A Good Investment?
With a three year total loss of 7.4%, Sturm, Ruger & Company, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Chris Killoy is paid around what is normal the leaders of comparable size companies.
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Shareholders may want to check for free if Sturm Ruger insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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.