Is Veritiv Corporation’s (NYSE:VRTV) CEO Pay Justified?

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In 2014 Mary Laschinger was appointed CEO of Veritiv Corporation (NYSE:VRTV). First, this article will compare CEO compensation with compensation at similar sized 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 method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Veritiv

How Does Mary Laschinger’s Compensation Compare With Similar Sized Companies?

According to our data, Veritiv Corporation has a market capitalization of US$567m, and pays its CEO total annual compensation worth US$6.6m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.5m.

As you can see, Mary Laschinger is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Veritiv Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Veritiv has changed from year to year.

NYSE:VRTV CEO Compensation, February 20th 2019
NYSE:VRTV CEO Compensation, February 20th 2019

Is Veritiv Corporation Growing?

Veritiv Corporation has reduced its earnings per share by an average of 94% a year, over the last three years (measured with a line of best fit). Its revenue is up 5.2% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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?

Veritiv Corporation has served shareholders reasonably well, with a total return of 13% over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary…

We compared the total CEO remuneration paid by Veritiv Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! So you may want to check if insiders are buying Veritiv shares with their own money (free access).

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

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 editorial-team@simplywallst.com. 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.