Al Rankin became the CEO of Hyster-Yale Materials Handling, Inc. (NYSE:HY) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Al Rankin’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Hyster-Yale Materials Handling, Inc. has a market cap of US$1.1b, and is paying total annual CEO compensation of US$4.5m. (This figure is for the year to December 2018). That’s a fairly small increase of 2.4% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$955k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.
Thus we can conclude that Al Rankin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hyster-Yale Materials Handling, Inc.. 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.
The graphic below shows how CEO compensation at Hyster-Yale Materials Handling has changed from year to year.
Is Hyster-Yale Materials Handling, Inc. Growing?
Over the last three years Hyster-Yale Materials Handling, Inc. has shrunk its earnings per share by an average of 22% per year (measured with a line of best fit). Its revenue is up 10% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Hyster-Yale Materials Handling, Inc. Been A Good Investment?
Hyster-Yale Materials Handling, Inc. has generated a total shareholder return of 2.3% over three years, so most shareholders wouldn’t be too disappointed. 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 Hyster-Yale Materials Handling, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.We think many shareholders would be underwhelmed with the business growth over the last three years.
While shareholder returns are acceptable, they don’t delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hyster-Yale Materials Handling (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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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.