What Can We Learn About Toro's (NYSE:TTC) CEO Compensation?

Rick Olson became the CEO of The Toro Company (NYSE:TTC) in 2016, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Toro.

Check out our latest analysis for Toro

How Does Total Compensation For Rick Olson Compare With Other Companies In The Industry?

According to our data, The Toro Company has a market capitalization of US$11b, and paid its CEO total annual compensation worth US$6.0m over the year to October 2020. That's a notable increase of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$871k.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$7.9m. From this we gather that Rick Olson is paid around the median for CEOs in the industry. Moreover, Rick Olson also holds US$2.7m worth of Toro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Toro allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

The Toro Company's Growth

The Toro Company has seen its earnings per share (EPS) increase by 7.4% a year over the past three years. In the last year, its revenue is up 7.6%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Toro Company Been A Good Investment?

We think that the total shareholder return of 65%, over three years, would leave most The Toro Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, The Toro Company is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't reporting great numbers in terms of EPS growth. At the same time, shareholder returns have remained strong over the same period. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Toro that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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