Scott Wine has been the CEO of Polaris Inc. (NYSE:PII) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Polaris.
Comparing Polaris Inc.'s CEO Compensation With the industry
According to our data, Polaris Inc. has a market capitalization of US$5.9b, and paid its CEO total annual compensation worth US$10m over the year to December 2019. Notably, that's an increase of 9.2% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$5.9m. Hence, we can conclude that Scott Wine is remunerated higher than the industry median. Furthermore, Scott Wine directly owns US$31m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 26% of total compensation represents salary and 74% is other remuneration. Polaris pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Polaris Inc.'s Growth Numbers
Polaris Inc. has seen its earnings per share (EPS) increase by 2.0% a year over the past three years. It saw its revenue drop 1.9% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Polaris Inc. Been A Good Investment?
Given the total shareholder loss of 3.2% over three years, many shareholders in Polaris Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Scott is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Polaris have arguably been worse, over the last three years. And the situation doesn't look all that good when you see Scott is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Polaris (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Switching gears from Polaris, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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