Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
John McConnell became the CEO of Worthington Industries, Inc. (NYSE:WOR) in 1993. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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 John McConnell’s Compensation Compare With Similar Sized Companies?
Our data indicates that Worthington Industries, Inc. is worth US$2.2b, and total annual CEO compensation is US$4.4m. (This figure is for the year to May 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$661k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
That means John McConnell receives fairly typical remuneration for the CEO of a company that size. 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 Worthington Industries has changed over time.
Is Worthington Industries, Inc. Growing?
Over the last three years Worthington Industries, Inc. has grown its earnings per share (EPS) by an average of 1.3% per year (using a line of best fit). Its revenue is up 5.0% over last year.
I would argue that the improvement in revenue isn’t particularly impressive, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing.
Has Worthington Industries, Inc. Been A Good Investment?
Given the total loss of 8.0% over three years, many shareholders in Worthington Industries, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
John McConnell is paid around what is normal the leaders of comparable size companies.
We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. So it would take a bold person to suggest the pay is too modest. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Worthington Industries (free visualization of insider trades).
If you want to buy a stock that is better than Worthington Industries, 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 email@example.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.