Ward Nye has been the CEO of Martin Marietta Materials, Inc. (NYSE:MLM) since 2010. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ward Nye’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Martin Marietta Materials, Inc. has a market cap of US$12b, and is paying total annual CEO compensation of US$9.0m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So Ward Nye receives a similar amount to the median CEO pay, amongst 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 Martin Marietta Materials has changed over time.
Is Martin Marietta Materials, Inc. Growing?
On average over the last three years, Martin Marietta Materials, Inc. has grown earnings per share (EPS) by 28% each year (using a line of best fit). In the last year, its revenue is up 6.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Martin Marietta Materials, Inc. Been A Good Investment?
Martin Marietta Materials, Inc. has generated a total shareholder return of 27% 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.
Ward Nye is paid around what is normal the leaders of larger companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Martin Marietta Materials.
Important note: Martin Marietta Materials may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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