Is Rexnord Corporation's (NYSE:RXN) CEO Paid Enough Relative To Peers?
Todd Adams became the CEO of Rexnord Corporation (NYSE:RXN) in 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
View our latest analysis for Rexnord
How Does Todd Adams's Compensation Compare With Similar Sized Companies?
Our data indicates that Rexnord Corporation is worth US$4.3b, and total annual CEO compensation was reported as US$6.8m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$960k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
As you can see, Todd Adams is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Rexnord 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 Rexnord has changed from year to year.
Is Rexnord Corporation Growing?
Rexnord Corporation has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.4% 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 Rexnord Corporation Been A Good Investment?
Boasting a total shareholder return of 57% over three years, Rexnord Corporation 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 Rexnord Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Rexnord shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
