Scott Wine has been the CEO of Polaris Industries Inc. (NYSE:PII) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
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How Does Scott Wine’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Polaris Industries Inc. has a market cap of US$5.2b, and is paying total annual CEO compensation of US$9.3m. (This figure is for the year to December 2018). That’s just a smallish increase of 5.2% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
Thus we can conclude that Scott Wine receives more in total compensation than the median of a group of companies in the same market, and of similar size to Polaris Industries Inc.. 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.
The graphic below shows how CEO compensation at Polaris Industries has changed from year to year.
Is Polaris Industries Inc. Growing?
Polaris Industries Inc. has reduced its earnings per share by an average of 1.2% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 13%.
In the last three years the company has failed to grow earnings per s. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Polaris Industries Inc. Been A Good Investment?
Polaris Industries Inc. has served shareholders reasonably well, with a total return of 12% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Polaris Industries Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! Shareholders may want to check for free if Polaris Industries insiders are buying or selling shares.
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.