Dan Florness became the CEO of Fastenal Company (NASDAQ:FAST) in 2016. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. 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 Dan Florness’s Compensation Compare With Similar Sized Companies?
Our data indicates that Fastenal Company is worth US$18b, and total annual CEO compensation is US$2.4m. (This number is for the twelve months until December 2018). That’s a notable increase of 19% on last year. While we always look at total compensation first, we note that the salary component is less, at US$593k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
Most shareholders would consider it a positive that Dan Florness takes less compensation than the CEOs of most other large companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Fastenal, below.
Is Fastenal Company Growing?
Fastenal Company has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). It achieved revenue growth of 13% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Fastenal Company Been A Good Investment?
Most shareholders would probably be pleased with Fastenal Company for providing a total return of 43% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It looks like Fastenal Company pays its CEO less than the average at large companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Dan Florness deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if Fastenal insiders are buying or selling shares.
If you want to buy a stock that is better than Fastenal, this free list of high return, low debt companies is a great place to look.
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