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In 2014 Craig Menear was appointed CEO of The Home Depot, Inc. (NYSE:HD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. 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 Craig Menear’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that The Home Depot, Inc. has a market cap of US$218b, and is paying total annual CEO compensation of US$11m. (This is based on the year to February 2019). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So Craig Menear 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 Home Depot has changed over time.
Is The Home Depot, Inc. Growing?
On average over the last three years, The Home Depot, Inc. has grown earnings per share (EPS) by 19% each year (using a line of best fit). Its revenue is up 7.4% over last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Home Depot, Inc. Been A Good Investment?
I think that the total shareholder return of 70%, over three years, would leave most The Home Depot, 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 Craig Menear is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Home Depot shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.