Yahoo Finance Is DICK'S Sporting Goods, Inc.'s (NYSE:DKS) CEO Paid Enough Relative To Peers?
Ed Stack has been the CEO of DICK'S Sporting Goods, Inc. (NYSE:DKS) since 1984. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for DICK'S Sporting Goods
How Does Ed Stack's Compensation Compare With Similar Sized Companies?
According to our data, DICK'S Sporting Goods, Inc. has a market capitalization of US$3.9b, and paid its CEO total annual compensation worth US$9.1m over the year to February 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$4.9m.
It would therefore appear that DICK'S Sporting Goods, Inc. pays Ed Stack more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at DICK'S Sporting Goods has changed over time.
Is DICK'S Sporting Goods, Inc. Growing?
Over the last three years DICK'S Sporting Goods, Inc. has grown its earnings per share (EPS) by an average of 9.8% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has DICK'S Sporting Goods, Inc. Been A Good Investment?
Since shareholders would have lost about 4.7% over three years, some DICK'S Sporting Goods, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount DICK'S Sporting Goods, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling DICK'S Sporting Goods (free visualization of insider trades).
If you want to buy a stock that is better than DICK'S Sporting Goods, this free list of high return, low debt companies is a great place to look.
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.
