Most Shareholders Will Probably Find That The CEO Compensation For The Home Depot, Inc. (NYSE:HD) Is Reasonable

Key Insights

• Home Depot to hold its Annual General Meeting on 22nd of May
• Salary of US$1.43m is part of CEO Ted Decker's total remuneration
• Total compensation is similar to the industry average
• Home Depot's total shareholder return over the past three years was 41% while its EPS was down 1.5% over the past three years

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Despite strong share price growth of 41% for The Home Depot, Inc. (NYSE:HD) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 22nd of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Home Depot

Comparing The Home Depot, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that The Home Depot, Inc. has a market capitalization of US$371b, and reported total annual CEO compensation of US$16m for the year to February 2025. That's a notable increase of 8.0% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

On comparing similar companies in the American Specialty Retail industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$16m. From this we gather that Ted Decker is paid around the median for CEOs in the industry. What's more, Ted Decker holds US$46m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2025	2024	Proportion (2025)
Salary	US$1.4m	US$1.4m	9%
Other	US$14m	US$13m	91%
Total Compensation	US$16m	US$14m	100%

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. In Home Depot's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

A Look at The Home Depot, Inc.'s Growth Numbers

The Home Depot, Inc. has reduced its earnings per share by 1.5% a year over the last three years. Its revenue is up 4.5% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Home Depot, Inc. Been A Good Investment?

We think that the total shareholder return of 41%, 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.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 Home Depot that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.