In 2004 Donald Duda was appointed CEO of Methode Electronics, Inc. (NYSE:MEI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Donald Duda’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Methode Electronics, Inc. has a market cap of US$1.4b, and reported total annual CEO compensation of US$1.4m for the year to April 2019. While we always look at total compensation first, we note that the salary component is less, at US$760k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.8m.
Most shareholders would consider it a positive that Donald Duda takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Methode Electronics has changed over time.
Is Methode Electronics, Inc. Growing?
On average over the last three years, Methode Electronics, Inc. has grown earnings per share (EPS) by 2.8% each year (using a line of best fit). It achieved revenue growth of 7.9% over the last year.
I’d prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Methode Electronics, Inc. Been A Good Investment?
Since shareholders would have lost about 5.7% over three years, some Methode Electronics, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like Methode Electronics, Inc. pays its CEO less than similar sized companies.
Donald Duda is paid less than CEOs of similar size companies, but growth hasn’t been particularly impressive and the total shareholder return over three years would leave many disappointed. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Methode Electronics (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.
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