Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 1997 Garry Ridge was appointed CEO of WD-40 Company (NASDAQ:WDFC). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Garry Ridge’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that WD-40 Company has a market cap of US$2.3b, and is paying total annual CEO compensation of US$2.4m. (This figure is for the year to August 2018). While we always look at total compensation first, we note that the salary component is less, at US$649k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.8m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at WD-40 has changed over time.
Is WD-40 Company Growing?
WD-40 Company has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.7%.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has WD-40 Company Been A Good Investment?
Boasting a total shareholder return of 66% over three years, WD-40 Company has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like WD-40 Company pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Garry Ridge deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if WD-40 insiders are buying or selling shares.
If you want to buy a stock that is better than WD-40, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.