Yahoo Finance Shareholders Will Probably Not Have Any Issues With Graco Inc.'s (NYSE:GGG) CEO Compensation
Key Insights
Graco will host its Annual General Meeting on 26th of April
Salary of US$985.0k is part of CEO Mark Sheahan's total remuneration
The overall pay is comparable to the industry average
Over the past three years, Graco's EPS grew by 15% and over the past three years, the total shareholder return was 18%
Under the guidance of CEO Mark Sheahan, Graco Inc. (NYSE:GGG) has performed reasonably well recently. As shareholders go into the upcoming AGM on 26th of April, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.
See our latest analysis for Graco
How Does Total Compensation For Mark Sheahan Compare With Other Companies In The Industry?
According to our data, Graco Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$9.2m over the year to December 2023. We note that's an increase of 44% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$985k.
In comparison with other companies in the American Machinery industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$13m. From this we gather that Mark Sheahan is paid around the median for CEOs in the industry. Moreover, Mark Sheahan also holds US$7.3m worth of Graco stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$985k | US$919k | 11% |
Other | US$8.3m | US$5.5m | 89% |
Total Compensation | US$9.2m | US$6.4m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Graco sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Graco Inc.'s Growth Numbers
Over the past three years, Graco Inc. has seen its earnings per share (EPS) grow by 15% per year. Its revenue is up 2.4% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Graco Inc. Been A Good Investment?
Graco Inc. has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Graco that investors should look into moving forward.
Switching gears from Graco, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
