Shareholders Will Most Likely Find The Home Depot, Inc.'s (NYSE:HD) CEO Compensation Acceptable

Key Insights

• Home Depot to hold its Annual General Meeting on 16th of May
• Total pay for CEO Ted Decker includes US$1.40m salary
• Total compensation is similar to the industry average
• Over the past three years, Home Depot's EPS grew by 8.4% and over the past three years, the total shareholder return was 15%

Under the guidance of CEO Ted Decker, The Home Depot, Inc. (NYSE:HD) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 16th of May. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Home Depot

How Does Total Compensation For Ted Decker Compare With Other Companies In The Industry?

According to our data, The Home Depot, Inc. has a market capitalization of US$344b, and paid its CEO total annual compensation worth US$14m over the year to January 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued 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$14m. So it looks like Home Depot compensates Ted Decker in line with the median for the industry. Furthermore, Ted Decker directly owns US$40m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.4m	US$1.4m	10%
Other	US$13m	US$13m	90%
Total Compensation	US$14m	US$15m	100%

On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. Home Depot sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

The Home Depot, Inc.'s Growth

The Home Depot, Inc. has seen its earnings per share (EPS) increase by 8.4% a year over the past three years. In the last year, its revenue is down 3.0%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 The Home Depot, Inc. Been A Good Investment?

The Home Depot, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Home Depot that investors should be aware of in a dynamic business environment.

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.