In 2010 Ward Nye was appointed CEO of Martin Marietta Materials, Inc. (NYSE:MLM). First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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$17b, and reported total annual CEO compensation of US$8.5m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Ward Nye receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Martin Marietta Materials has changed over time.
Is Martin Marietta Materials, Inc. Growing?
Martin Marietta Materials, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). It achieved revenue growth of 9.3% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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?
I think that the total shareholder return of 52%, over three years, would leave most Martin Marietta Materials, Inc. shareholders smiling. 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.
Remuneration for Ward Nye is close enough to the median pay for a CEO of a large company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Martin Marietta Materials shares with their own money (free access).
If you want to buy a stock that is better than Martin Marietta Materials, this free list of high return, low debt companies is a great place to look.
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