Here's Why We Think Patterson Companies, Inc.'s (NASDAQ:PDCO) CEO Compensation Looks Fair for the time being

By
Simply Wall St
Published
September 07, 2021
NasdaqGS:PDCO
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Performance at Patterson Companies, Inc. (NASDAQ:PDCO) has been reasonably good and CEO Mark Walchirk has done a decent job of steering the company in the right direction. 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 13 September 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Patterson Companies

How Does Total Compensation For Mark Walchirk Compare With Other Companies In The Industry?

At the time of writing, our data shows that Patterson Companies, Inc. has a market capitalization of US$3.0b, and reported total annual CEO compensation of US$4.8m for the year to April 2021. We note that's a decrease of 19% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$803k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.7m. From this we gather that Mark Walchirk is paid around the median for CEOs in the industry. Moreover, Mark Walchirk also holds US$4.2m worth of Patterson Companies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$803k US$871k 17%
Other US$4.0m US$5.0m 83%
Total CompensationUS$4.8m US$5.9m100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Patterson Companies is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NasdaqGS:PDCO CEO Compensation September 7th 2021

A Look at Patterson Companies, Inc.'s Growth Numbers

Patterson Companies, Inc. has reduced its earnings per share by 1.3% a year over the last three years. Its revenue is up 16% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Patterson Companies, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Patterson Companies, Inc. for providing a total return of 49% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Patterson Companies you should be aware of, and 2 of them don't sit too well with us.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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