Shareholders Will Probably Not Have Any Issues With Church & Dwight Co., Inc.'s (NYSE:CHD) CEO Compensation

By
Simply Wall St
Published
April 24, 2021
NYSE:CHD

CEO Matt Farrell has done a decent job of delivering relatively good performance at Church & Dwight Co., Inc. (NYSE:CHD) recently. As shareholders go into the upcoming AGM on 29 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Church & Dwight

Comparing Church & Dwight Co., Inc.'s CEO Compensation With the industry

According to our data, Church & Dwight Co., Inc. has a market capitalization of US$21b, and paid its CEO total annual compensation worth US$9.9m over the year to December 2020. We note that's an increase of 10% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. So it looks like Church & Dwight compensates Matt Farrell in line with the median for the industry. Moreover, Matt Farrell also holds US$11m worth of Church & Dwight stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$1.1m US$1.1m 11%
Other US$8.8m US$7.9m 89%
Total CompensationUS$9.9m US$9.0m100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Church & Dwight 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.

ceo-compensation
NYSE:CHD CEO Compensation April 24th 2021

Church & Dwight Co., Inc.'s Growth

Over the past three years, Church & Dwight Co., Inc. has seen its earnings per share (EPS) grow by 2.4% per year. In the last year, its revenue is up 12%.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Church & Dwight Co., Inc. Been A Good Investment?

Most shareholders would probably be pleased with Church & Dwight Co., Inc. for providing a total return of 95% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Church & Dwight that investors should look into moving forward.

Switching gears from Church & Dwight, 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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