How Should Investors React To Oil-Dri Corporation of America's (NYSE:ODC) CEO Pay?

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Daniel Jaffee became the CEO of Oil-Dri Corporation of America (NYSE:ODC) in 1997. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Oil-Dri of America

How Does Daniel Jaffee's Compensation Compare With Similar Sized Companies?

Our data indicates that Oil-Dri Corporation of America is worth US$238m, and total annual CEO compensation is US$1.3m. (This is based on the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at US$700k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.1m.

So Daniel Jaffee is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Oil-Dri of America has changed over time.

Is Oil-Dri Corporation of America Growing?

Oil-Dri Corporation of America has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Revenue was pretty flat on last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Oil-Dri Corporation of America Been A Good Investment?

Oil-Dri Corporation of America has generated a total shareholder return of 3.5% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Remuneration for Daniel Jaffee is close enough to the median pay for a CEO of a similar sized company .

We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling Oil-Dri of America shares (free trial).

If you want to buy a stock that is better than Oil-Dri of America, 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 editorial-team@simplywallst.com. 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.