Yahoo Finance What We Learned About Tempur Sealy International's (NYSE:TPX) CEO Pay
Scott Thompson has been the CEO of Tempur Sealy International, Inc. (NYSE:TPX) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tempur Sealy International.
See our latest analysis for Tempur Sealy International
How Does Total Compensation For Scott Thompson Compare With Other Companies In The Industry?
According to our data, Tempur Sealy International, Inc. has a market capitalization of US$4.9b, and paid its CEO total annual compensation worth US$14m over the year to December 2019. That's a notable increase of 26% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.3m. This suggests that Scott Thompson is paid more than the median for the industry. What's more, Scott Thompson holds US$5.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.1m | US$1.1m | 8% |
Other | US$13m | US$10m | 92% |
Total Compensation | US$14m | US$11m | 100% |
Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Tempur Sealy International 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.
A Look at Tempur Sealy International, Inc.'s Growth Numbers
Tempur Sealy International, Inc.'s earnings per share (EPS) grew 3.7% per year over the last three years. It achieved revenue growth of 13% over the last year.
This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Tempur Sealy International, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Tempur Sealy International, Inc. for providing a total return of 43% over three years. 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...
As previously discussed, Scott is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns have been positive for the last three years. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. So, although we would've liked to see stronger EPS growth, positive investor returns lead us to believe CEO compensation is reasonable.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Tempur Sealy International that investors should look into moving forward.
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.
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.
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