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John Morikis has been the CEO of The Sherwin-Williams Company (NYSE:SHW) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does John Morikis’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that The Sherwin-Williams Company has a market cap of US$43b, and is paying total annual CEO compensation of US$13m. (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. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was 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 John Morikis is paid around the average of 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 Sherwin-Williams, below.
Is The Sherwin-Williams Company Growing?
Over the last three years The Sherwin-Williams Company has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). It achieved revenue growth of 8.8% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Has The Sherwin-Williams Company Been A Good Investment?
I think that the total shareholder return of 62%, over three years, would leave most The Sherwin-Williams Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
John Morikis is paid around the same as most CEOs of large companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sherwin-Williams (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.