In 2016 George Roeth was appointed CEO of Central Garden & Pet Company (NASDAQ:CENT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does George Roeth's Compensation Compare With Similar Sized Companies?
According to our data, Central Garden & Pet Company has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$2.4m. (This number is for the twelve months until September 2018). While we always look at total compensation first, we note that the salary component is less, at US$821k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Central Garden & Pet has changed from year to year.
Is Central Garden & Pet Company Growing?
On average over the last three years, Central Garden & Pet Company has grown earnings per share (EPS) by 30% each year (using a line of best fit). Its revenue is up 8.3% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Central Garden & Pet Company Been A Good Investment?
With a total shareholder return of 13% over three years, Central Garden & Pet Company shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like Central Garden & Pet Company pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that George Roeth is overcompensated.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Central Garden & Pet.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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