We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Dollar General Corporation's (NYSE:DG) CEO For Now

By
Simply Wall St
Published
May 19, 2021
NYSE:DG
Source: Shutterstock

Performance at Dollar General Corporation (NYSE:DG) has been reasonably good and CEO Todd Vasos has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 26 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Dollar General

Comparing Dollar General Corporation's CEO Compensation With the industry

Our data indicates that Dollar General Corporation has a market capitalization of US$49b, and total annual CEO compensation was reported as US$16m for the year to January 2021. We note that's an increase of 37% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. Hence, we can conclude that Todd Vasos is remunerated higher than the industry median. Moreover, Todd Vasos also holds US$36m worth of Dollar General stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$1.3m US$1.3m 8%
Other US$15m US$11m 92%
Total CompensationUS$16m US$12m100%

Talking in terms of the industry, salary represented approximately 11% of total compensation out of all the companies we analyzed, while other remuneration made up 89% of the pie. Dollar General pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:DG CEO Compensation May 20th 2021

A Look at Dollar General Corporation's Growth Numbers

Over the past three years, Dollar General Corporation has seen its earnings per share (EPS) grow by 24% per year. It achieved revenue growth of 22% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Dollar General Corporation Been A Good Investment?

Most shareholders would probably be pleased with Dollar General Corporation for providing a total return of 116% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Dollar General that you should be aware of before investing.

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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