Keith Walters became the CEO of Ennis, Inc. (NYSE:EBF) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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 Keith Walters’s Compensation Compare With Similar Sized Companies?
Our data indicates that Ennis, Inc. is worth US$525m, and total annual CEO compensation was reported as US$3.8m for the year to February 2019. While we always look at total compensation first, we note that the salary component is less, at US$943k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
As you can see, Keith Walters is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ennis, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. Shareholders might be interested in this free visualization of analyst forecasts.
You can see, below, how CEO compensation at Ennis has changed over time.
Is Ennis, Inc. Growing?
Ennis, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 14%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has Ennis, Inc. Been A Good Investment?
I think that the total shareholder return of 46%, over three years, would leave most Ennis, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Ennis, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Ennis insiders are buying or selling shares.
If you want to buy a stock that is better than Ennis, this free list of high return, low debt companies is a great place to look.
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