Does The TJX Companies, Inc.’s (NYSE:TJX) CEO Pay Reflect Performance?

Ernie Herrman has been the CEO of The TJX Companies, Inc. (NYSE:TJX) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for TJX Companies

How Does Ernie Herrman’s Compensation Compare With Similar Sized Companies?

According to our data, The TJX Companies, Inc. has a market capitalization of US$75b, and paid its CEO total annual compensation worth US$19m over the year to February 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$1.6m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over US$8.0b, we found that their 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.

As you can see, Ernie Herrman is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean The TJX Companies, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at TJX Companies has changed from year to year.

NYSE:TJX CEO Compensation, January 22nd 2020
NYSE:TJX CEO Compensation, January 22nd 2020

Is The TJX Companies, Inc. Growing?

On average over the last three years, The TJX Companies, Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). It achieved revenue growth of 4.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has The TJX Companies, Inc. Been A Good Investment?

I think that the total shareholder return of 75%, over three years, would leave most The TJX Companies, 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.

In Summary…

We compared the total CEO remuneration paid by The TJX Companies, Inc., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying TJX Companies shares with their own money (free access).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.