J. Nauman became the CEO of Brady Corporation (NYSE:BRC) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 J. Nauman's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Brady Corporation has a market cap of US$3.1b, and reported total annual CEO compensation of US$5.2m for the year to July 2019. That's a modest increase of 1.3% on the prior year year. While we always look at total compensation first, we note that the salary component is less, at US$794k. 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 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$5.1m.
That means J. Nauman receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Brady has changed from year to year.
Is Brady Corporation Growing?
On average over the last three years, Brady Corporation has grown earnings per share (EPS) by 14% each year (using a line of best fit). In the last year, its revenue is down 1.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Brady Corporation Been A Good Investment?
Most shareholders would probably be pleased with Brady Corporation for providing a total return of 61% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
J. Nauman is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Brady shares with their own money (free access).
If you want to buy a stock that is better than Brady, this free list of high return, low debt companies is a great place to look.
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