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In 2012 Karen Colonias was appointed CEO of Simpson Manufacturing Co., Inc. (NYSE:SSD). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Karen Colonias’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Simpson Manufacturing Co., Inc. has a market cap of US$2.9b, and is paying total annual CEO compensation of US$3.0m. (This number is for the twelve months until December 2018). That’s less than last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$740k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.3m.
A first glance this seems like a real positive for shareholders, since Karen Colonias is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Simpson Manufacturing has changed over time.
Is Simpson Manufacturing Co., Inc. Growing?
On average over the last three years, Simpson Manufacturing Co., Inc. has grown earnings per share (EPS) by 18% each year (using a line of best fit). Its revenue is up 9.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Simpson Manufacturing Co., Inc. Been A Good Investment?
I think that the total shareholder return of 77%, over three years, would leave most Simpson Manufacturing Co., Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Simpson Manufacturing Co., Inc. is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Karen Colonias deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Simpson Manufacturing (free visualization of insider trades).
Important note: Simpson Manufacturing may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.