Stock Analysis

We Think Some Shareholders May Hesitate To Increase Sturm, Ruger & Company, Inc.'s (NYSE:RGR) CEO Compensation

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Under the guidance of CEO Chris Killoy, Sturm, Ruger & Company, Inc. (NYSE:RGR) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 12 May 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Sturm Ruger

How Does Total Compensation For Chris Killoy Compare With Other Companies In The Industry?

According to our data, Sturm, Ruger & Company, Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$3.8m over the year to December 2020. We note that's an increase of 99% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$625k.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.0m. This suggests that Chris Killoy is paid more than the median for the industry. Moreover, Chris Killoy also holds US$10m worth of Sturm Ruger stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$625k US$500k 16%
Other US$3.2m US$1.4m 84%
Total CompensationUS$3.8m US$1.9m100%

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. Although there is a difference in how total compensation is set, Sturm Ruger more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NYSE:RGR CEO Compensation May 6th 2021

Sturm, Ruger & Company, Inc.'s Growth

Sturm, Ruger & Company, Inc.'s earnings per share (EPS) grew 21% per year over the last three years. It achieved revenue growth of 39% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Sturm, Ruger & Company, Inc. Been A Good Investment?

Sturm, Ruger & Company, Inc. has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Sturm Ruger (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Sturm Ruger 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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