How Much Does NL Industries' (NYSE:NL) CEO Make?

This article will reflect on the compensation paid to Robert Graham who has served as CEO of NL Industries, Inc. (NYSE:NL) since 2014. This analysis will also assess whether NL Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for NL Industries

Comparing NL Industries, Inc.'s CEO Compensation With the industry

Our data indicates that NL Industries, Inc. has a market capitalization of US$206m, and total annual CEO compensation was reported as US$5.7m for the year to December 2019. That's a notable increase of 16% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$5.7m.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$3.7m. Hence, we can conclude that Robert Graham is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. On a company level, NL Industries prefers to reward its CEO through a salary, opting not to pay Robert Graham through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

NL Industries, Inc.'s Growth

Over the last three years, NL Industries, Inc. has shrunk its earnings per share by 40% per year. It saw its revenue drop 6.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has NL Industries, Inc. Been A Good Investment?

Since shareholders would have lost about 70% over three years, some NL Industries, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

NL Industries pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, NL Industries, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for NL Industries that you should be aware of before investing.

Important note: NL Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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