AutoZone, Inc.'s (NYSE:AZO) CEO Looks Like They Deserve Their Pay Packet

The performance at AutoZone, Inc. (NYSE:AZO) has been quite strong recently and CEO Bill Rhodes has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 14 December 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out the opportunities and risks within the US Specialty Retail industry.

How Does Total Compensation For Bill Rhodes Compare With Other Companies In The Industry?

Our data indicates that AutoZone, Inc. has a market capitalization of US$47b, and total annual CEO compensation was reported as US$14m for the year to August 2022. That's slightly lower by 3.4% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. So it looks like AutoZone compensates Bill Rhodes in line with the median for the industry. Furthermore, Bill Rhodes directly owns US$79m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$1.1m	US$1.1m	7%
Other	US$13m	US$14m	93%
Total Compensation	US$14m	US$15m	100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. In AutoZone's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

AutoZone, Inc.'s Growth

AutoZone, Inc. has seen its earnings per share (EPS) increase by 25% a year over the past three years. In the last year, its revenue is up 9.4%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has AutoZone, Inc. Been A Good Investment?

We think that the total shareholder return of 97%, over three years, would leave most AutoZone, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for AutoZone (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.