Mike Thaman became the CEO of Owens Corning (NYSE:OC) in 2007. 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 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 Mike Thaman’s Compensation Compare With Similar Sized Companies?
Our data indicates that Owens Corning is worth US$5.2b, and total annual CEO compensation is US$10m. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.2m.
As you can see, Mike Thaman is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Owens Corning is paying too much. 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 Owens Corning, below.
Is Owens Corning Growing?
Over the last three years Owens Corning has grown its earnings per share (EPS) by an average of 3.2% per year (using a line of best fit). It achieved revenue growth of 11% over the last year.
This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn’t bad, either. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Owens Corning Been A Good Investment?
With a total shareholder return of 5.4% over three years, Owens Corning has done okay by shareholders. 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 Owens Corning, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue. So you may want to check if insiders are buying Owens Corning shares with their own money (free access).
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 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.