Ward Timken became the CEO of TimkenSteel Corporation (NYSE:TMST) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ward Timken’s Compensation Compare With Similar Sized Companies?
According to our data, TimkenSteel Corporation has a market capitalization of US$517m, and pays its CEO total annual compensation worth US$6.1m. We note that’s an increase of 37% above last year. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO compensation was US$1.5m.
As you can see, Ward Timken is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean TimkenSteel Corporation is paying too much. 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 TimkenSteel has changed from year to year.
Is TimkenSteel Corporation Growing?
On average over the last three years, TimkenSteel Corporation has grown earnings per share (EPS) by 4.1% each year. Its revenue is up 29% over last year.
It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while I’d stop short of saying growth is absolutely outstanding, there are definitely some clear positives!
You might want to check this free visual report on analyst forecasts for future earnings.
Has TimkenSteel Corporation Been A Good Investment?
TimkenSteel Corporation has served shareholders reasonably well, with a total return of 20% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at TimkenSteel Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. So it’s certainly hard to argue that the CEO is modestly paid, although we don’t see the remuneration as an issue.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.