Mark Millett became the CEO of Steel Dynamics, Inc. (NASDAQ:STLD) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. 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 Mark Millett’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Steel Dynamics, Inc. has a market cap of US$6.0b, and is paying total annual CEO compensation of US$10m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.9m.
As you can see, Mark Millett is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Steel Dynamics, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Steel Dynamics has changed from year to year.
Is Steel Dynamics, Inc. Growing?
Steel Dynamics, Inc. has increased its earnings per share (EPS) by an average of 58% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has Steel Dynamics, Inc. Been A Good Investment?
With a total shareholder return of 17% over three years, Steel Dynamics, Inc. shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Steel Dynamics, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Steel Dynamics 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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