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In 2007 Mike Thaman was appointed CEO of Owens Corning (NYSE:OC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Mike Thaman’s Compensation Compare With Similar Sized Companies?
According to our data, Owens Corning has a market capitalization of US$5.3b, and pays its CEO total annual compensation worth US$8.7m. (This is based on the year to December 2018). That’s below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
So Mike Thaman receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Owens Corning has changed from year to year.
Is Owens Corning Growing?
On average over the last three years, Owens Corning has grown earnings per share (EPS) by 5.2% each year (using a line of best fit). It achieved revenue growth of 6.6% over the last year.
I would argue that the improvement in revenue isn’t particularly impressive, 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 Owens Corning Been A Good Investment?
Owens Corning has generated a total shareholder return of 0.4% over three years, so most shareholders wouldn’t be too disappointed. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Mike Thaman is paid around what is normal the leaders of comparable size companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While the CEO may not be underpaid, we don’t think the pay is too generous either. Whatever your view on compensation, you might want to check if insiders are buying or selling Owens Corning shares (free trial).
If you want to buy a stock that is better than Owens Corning, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.