Walt Scheller has been the CEO of Warrior Met Coal, Inc. (NYSE:HCC) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Walt Scheller's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Warrior Met Coal, Inc. has a market cap of US$513m, and reported total annual CEO compensation of US$4.0m for the year to December 2019. Notably, that's an increase of 24% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$666k. 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$200m to US$800m, and the median CEO total compensation was US$2.3m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Warrior Met Coal. Speaking on an industry level, we can see that nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. Readers will want to know that Warrior Met Coal pays a modest slice of remuneration through salary, as compared to the wider sector.
Thus we can conclude that Walt Scheller receives more in total compensation than the median of a group of companies in the same market, and of similar size to Warrior Met Coal, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Warrior Met Coal has changed from year to year.
Is Warrior Met Coal, Inc. Growing?
Warrior Met Coal, Inc. has seen earnings per share (EPS) move positively by an average of 41% a year, over the last three years (using a line of best fit). It saw its revenue drop 8.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Warrior Met Coal, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Warrior Met Coal, Inc. for providing a total return of 35% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by Warrior Met Coal, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. On another note, Warrior Met Coal has 5 warning signs (and 1 which is a bit unpleasant) we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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