We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Vulcan Materials Company's (NYSE:VMC) CEO For Now

By
Simply Wall St
Published
May 07, 2021
NYSE:VMC

Under the guidance of CEO Tom Hill, Vulcan Materials Company (NYSE:VMC) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Vulcan Materials

Comparing Vulcan Materials Company's CEO Compensation With the industry

Our data indicates that Vulcan Materials Company has a market capitalization of US$25b, and total annual CEO compensation was reported as US$9.9m for the year to December 2020. That's a fairly small increase of 3.4% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$2.0m. Accordingly, our analysis reveals that Vulcan Materials Company pays Tom Hill north of the industry median. Furthermore, Tom Hill directly owns US$29m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.2m US$1.1m 12%
Other US$8.7m US$8.4m 88%
Total CompensationUS$9.9m US$9.6m100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Vulcan Materials 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:VMC CEO Compensation May 8th 2021

A Look at Vulcan Materials Company's Growth Numbers

Vulcan Materials Company's earnings per share (EPS) grew 4.5% per year over the last three years. Its revenue is down 2.1% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Vulcan Materials Company Been A Good Investment?

We think that the total shareholder return of 55%, over three years, would leave most Vulcan Materials Company 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.

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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Vulcan Materials that investors should be aware of in a dynamic business environment.

Switching gears from Vulcan Materials, 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.

Promoted
When trading Vulcan Materials or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.


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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record.