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Michael Hartnett has been the CEO of RBC Bearings Incorporated (NASDAQ:ROLL) since 1992. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Michael Hartnett’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that RBC Bearings Incorporated has a market cap of US$3.3b, and is paying total annual CEO compensation of US$7.9m. (This is based on the year to March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$775k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
Thus we can conclude that Michael Hartnett receives more in total compensation than the median of a group of companies in the same market, and of similar size to RBC Bearings Incorporated. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at RBC Bearings, below.
Is RBC Bearings Incorporated Growing?
RBC Bearings Incorporated has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). Its revenue is up 6.9% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has RBC Bearings Incorporated Been A Good Investment?
I think that the total shareholder return of 91%, over three years, would leave most RBC Bearings Incorporated shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at RBC Bearings Incorporated with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at RBC Bearings.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.