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Should You Worry About McCormick & Company, Incorporated's (NYSE:MKC) CEO Pay Cheque?

Simply Wall St

In 2016 Lawrence Kurzius was appointed CEO of McCormick & Company, Incorporated (NYSE:MKC). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for McCormick

How Does Lawrence Kurzius's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that McCormick & Company, Incorporated has a market cap of US$22b, and reported total annual CEO compensation of US$15m for the year to November 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

It would therefore appear that McCormick & Company, Incorporated pays Lawrence Kurzius more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

NYSE:MKC CEO Compensation, January 29th 2020

Is McCormick & Company, Incorporated Growing?

Over the last three years McCormick & Company, Incorporated has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). It achieved revenue growth of 2.1% over the last year.

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. You might want to check this free visual report on analyst forecasts for future earnings.

Has McCormick & Company, Incorporated Been A Good Investment?

Boasting a total shareholder return of 83% over three years, McCormick & Company, Incorporated has done well by shareholders. 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...

We compared total CEO remuneration at McCormick & Company, Incorporated with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, 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. Shareholders may want to check for free if McCormick insiders are buying or selling shares.

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.