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How Much Did Automatic Data Processing's (NASDAQ:ADP) CEO Pocket Last Year?
Carlos Rodriguez has been the CEO of Automatic Data Processing, Inc. (NASDAQ:ADP) since 2011, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Automatic Data Processing
Comparing Automatic Data Processing, Inc.'s CEO Compensation With the industry
According to our data, Automatic Data Processing, Inc. has a market capitalization of US$73b, and paid its CEO total annual compensation worth US$18m over the year to June 2020. That's a slightly lower by 7.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$989k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$11m. Hence, we can conclude that Carlos Rodriguez is remunerated higher than the industry median. Moreover, Carlos Rodriguez also holds US$16m worth of Automatic Data Processing stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$989k | US$1.1m | 6% |
| Other | US$17m | US$18m | 94% |
| Total Compensation | US$18m | US$19m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Automatic Data Processing pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Automatic Data Processing, Inc.'s Growth
Automatic Data Processing, Inc.'s earnings per share (EPS) grew 13% per year over the last three years. Its revenue is up 1.9% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Automatic Data Processing, Inc. Been A Good Investment?
We think that the total shareholder return of 54%, over three years, would leave most Automatic Data Processing, Inc. shareholders smiling. 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.
In Summary...
As we touched on above, Automatic Data Processing, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, Automatic Data Processing has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Carlos's performance.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Automatic Data Processing (free visualization of insider trades).
Switching gears from Automatic Data Processing, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
M
The Foxhole
Everyone's watching the oil price. The harder problem is the gas that can't take a detour.
88
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Rob_Curious
What I've learnt in the last six months is that fuel supply disruption is a real portfolio risk, and one of the better hedges is a small allocation to shipping. Though it's insane how much these have run up this year.
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frank_ub3n0
Spot on. Shipping and logistics is much larger constraint for gas than oil. Sorry to break it to you. No quick fixes for that.
Mitchell LawlerMarket Insights
What happens to energy stocks as the fix gets built?
Conflict around the Strait of Hormuz has led investors to oil and tankers. The trouble is, the antidote to the chokepoints is already being built, and it may not reward the same energy stocks.
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About NasdaqGS:ADP
Automatic Data Processing
Provides cloud-based human capital management (HCM) solutions worldwide.
Solid track record with excellent balance sheet and pays a dividend.
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Trending Discussion
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anthony_x0j2w on Platform Group SE KGaA ·
Hello,(I am a shareholder).I spent the summer investigating in whatever I was able to find in the press, the trustee, or legal, and comparing it to FS Benner's declaration/transcripts:press: MM has a tendancy to use facts, modify them and turn them the way they want: 100% of their claims against TPG0 is traçable factually, 80% is flawed and interpreted. Example are numerous: 11M loans banks to be paid seems right, but it has not been an issue at all, it has been paid in full. (and it happens all the time in every business...); the previous HR becoming a financial director in the article herself being attacked by TPG on the legal side; the wrong address of curator (if truly announced by TPG).Trustee: according to my research (which can be incomplete) no communication to the Nordic trustee (hereby, bond holders) has been done on a, indebtedness (late payment) > 1M€, which is their obligation by contract (clause 14.d - https://corporate.the-platform-group.com/bond/) => this is a sign of a huge lie and fraud, or the sign that there is no indebtedness > 1M€ over the whole TPG group.Legal: still awaiting for an answer, probable that I won't get it.VALUATIONYou can spent hours working the fundamentals, if they're flawed...the thesis falls.Anyway, I always substracts the badwill (that I consider non-current - you have it in the CFS) & non-controlling interests from my valuation:Earnings ~22MFCF ~40M€The financial statements are not the issue here, we are more on an cheap option on the sincerity of the accounts that a real valuation. Unfortunately, these are unverifiable elements, hence the low price./!\ Careful:the accounts are consolidated and skip the subsidiaries issues...Careful with the business model: TPG0 is a financial holding that acquire subsidiaries, hold the debt, and has no operations. 100% of the Cash Flow comes from subs' dividends => it is a risk here, more a plumber risk than an operational one, but nevertheless...The auditor is too small, and managed by the same firm than before, with 140K€/year commission => it's too low, nobody external really reviewed what Benner and his team are doing internallycapital increase do not go through the CFS, but through change in equity AND equity in the BSIf the equity stays low too long, the WACC increase will be unbearable (I have a 30% global, with a 118% on equity): diluting is expensive => TPG machine can stay broken for a while.Most of the people I talk with never saw this, while this is ESSENTIAL to Benner's business model.SEVERAL EVENTS THAT COULD CHANGE:AEP is being audited by KPMG: if Benner plays the "we will propose KPMG to our shareholders BEOY", this can increase the trust in him significantly/KPMG (or other) to validate the 2026 IFRS accounts & having a word on HGB's: though still consolidated, at least we'll know...AEP being eventually acquired: while it carries a high integration risk due to its size, they talked about it so many times, that trust goes with it.Without this combination of event, the equity is doomed to stay at this level, IMO.Do not forget to also follow the bond: with TPG's announced safe harbor plan for buyback (25% of daily exchange), it is also interesting to check this illiquid and retail market: https://live.deutsche-boerse.com/bond/no0013256834-the-platform-group-ag-8-875-24-28?mic=XFRA
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