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Jerry Volas became the CEO of TopBuild Corp. (NYSE:BLD) in 2015. 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. 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 Jerry Volas’s Compensation Compare With Similar Sized Companies?
According to our data, TopBuild Corp. has a market capitalization of US$2.4b, and pays its CEO total annual compensation worth US$4.2m. (This figure is for the year to December 2018). That’s a modest increase of 3.6% on the prior year year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$831k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
So Jerry Volas receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at TopBuild has changed from year to year.
Is TopBuild Corp. Growing?
Over the last three years TopBuild Corp. has grown its earnings per share (EPS) by an average of 34% per year (using a line of best fit). In the last year, its revenue is up 25%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has TopBuild Corp. Been A Good Investment?
I think that the total shareholder return of 123%, over three years, would leave most TopBuild Corp. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Jerry Volas is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling TopBuild 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.
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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.