Jim Loree became the CEO of Stanley Black & Decker, Inc. (NYSE:SWK) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jim Loree’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Stanley Black & Decker, Inc. has a market cap of US$19b, and is paying total annual CEO compensation of US$16m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
As you can see, Jim Loree is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Stanley Black & Decker, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Stanley Black & Decker has changed over time.
Is Stanley Black & Decker, Inc. Growing?
Over the last three years Stanley Black & Decker, Inc. has grown its earnings per share (EPS) by an average of 6.2% per year (using a line of best fit). It achieved revenue growth of 9.5% over the last year.
I’d prefer higher revenue growth, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Stanley Black & Decker, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Stanley Black & Decker, Inc. for providing a total return of 38% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Stanley Black & Decker, Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Stanley Black & Decker shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.