Doug Black became the CEO of SiteOne Landscape Supply, Inc. (NYSE:SITE) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether SiteOne Landscape Supply pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for SiteOne Landscape Supply
How Does Total Compensation For Doug Black Compare With Other Companies In The Industry?
According to our data, SiteOne Landscape Supply, Inc. has a market capitalization of US$5.9b, and paid its CEO total annual compensation worth US$4.1m over the year to December 2019. We note that's an increase of 16% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$798k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.2m. Accordingly, SiteOne Landscape Supply pays its CEO under the industry median. Furthermore, Doug Black directly owns US$47m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$798k | US$750k | 20% |
| Other | US$3.3m | US$2.8m | 80% |
| Total Compensation | US$4.1m | US$3.5m | 100% |
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. SiteOne Landscape Supply sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
SiteOne Landscape Supply, Inc.'s Growth
SiteOne Landscape Supply, Inc. has seen its earnings per share (EPS) increase by 33% a year over the past three years. It achieved revenue growth of 12% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has SiteOne Landscape Supply, Inc. Been A Good Investment?
Most shareholders would probably be pleased with SiteOne Landscape Supply, Inc. for providing a total return of 90% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we noted earlier, SiteOne Landscape Supply pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Doug's performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for SiteOne Landscape Supply that investors should look into moving forward.
Switching gears from SiteOne Landscape Supply, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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