Keith Allman became the CEO of Masco Corporation (NYSE:MAS) in 2014. First, this article will compare CEO compensation with compensation at other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Keith Allman’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Masco Corporation has a market cap of US$12b, and is paying total annual CEO compensation of US$12m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.2m. 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 Keith Allman 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.
You can see, below, how CEO compensation at Masco has changed over time.
Is Masco Corporation Growing?
Masco Corporation has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 3.9% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
Has Masco Corporation Been A Good Investment?
Masco Corporation has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Keith Allman is paid around what is normal the leaders of larger companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Masco shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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