Yahoo Finance Does Donaldson Company, Inc.'s (NYSE:DCI) CEO Salary Reflect Performance?
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In 2015 Tod Carpenter was appointed CEO of Donaldson Company, Inc. (NYSE:DCI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Donaldson Company
How Does Tod Carpenter's Compensation Compare With Similar Sized Companies?
According to our data, Donaldson Company, Inc. has a market capitalization of US$6.3b, and pays its CEO total annual compensation worth US$5.9m. (This number is for the twelve months until July 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$942k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
So Tod Carpenter is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Donaldson Company has changed over time.
Is Donaldson Company, Inc. Growing?
Donaldson Company, Inc. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 6.5%.
This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Donaldson Company, Inc. Been A Good Investment?
Boasting a total shareholder return of 47% over three years, Donaldson Company, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Tod Carpenter is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. 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 Donaldson Company shares (free trial).
Important note: Donaldson Company may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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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. Thank you for reading.
