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Tod Carpenter has been the CEO of Donaldson Company, Inc. (NYSE:DCI) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Tod Carpenter Compare With Other Companies In The Industry?
At the time of writing, our data shows that Donaldson Company, Inc. has a market capitalization of US$6.5b, and reported total annual CEO compensation of US$5.5m for the year to July 2020. Notably, that's a decrease of 13% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$7.1m. So it looks like Donaldson Company compensates Tod Carpenter in line with the median for the industry. Furthermore, Tod Carpenter directly owns US$9.8m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. According to our research, Donaldson Company has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Donaldson Company, Inc.'s Growth
Over the past three years, Donaldson Company, Inc. has seen its earnings per share (EPS) grow by 4.9% per year. Its revenue is down 9.2% over the previous year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Donaldson Company, Inc. Been A Good Investment?
With a total shareholder return of 13% over three years, Donaldson Company, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
As we noted earlier, Donaldson Company pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Tod should get a raise.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Donaldson Company that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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