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Mary Laschinger has been the CEO of Veritiv Corporation (NYSE:VRTV) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mary Laschinger’s Compensation Compare With Similar Sized Companies?
Our data indicates that Veritiv Corporation is worth US$308m, and total annual CEO compensation is US$6.8m. (This is based on the year to December 2018). That’s a fairly small increase of 3.4% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.
Thus we can conclude that Mary Laschinger receives more in total compensation than the median of a group of companies in the same market, and of similar size to Veritiv Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Veritiv has changed over time.
Is Veritiv Corporation Growing?
Over the last three years Veritiv Corporation has shrunk its earnings per share by an average of 104% per year (measured with a line of best fit). Revenue was pretty flat on last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Veritiv Corporation Been A Good Investment?
Since shareholders would have lost about 51% over three years, some Veritiv Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Veritiv Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Veritiv shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.