Yahoo Finance Is Reliance Steel & Aluminum Co’s (NYSE:RS) CEO Pay Justified?
Gregg Mollins has been the CEO of Reliance Steel & Aluminum Co (NYSE:RS) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Reliance Steel & Aluminum
How Does Gregg Mollins’s Compensation Compare With Similar Sized Companies?
Our data indicates that Reliance Steel & Aluminum Co is worth US$5.7b, and total annual CEO compensation is US$11m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.6m.
Thus we can conclude that Gregg Mollins receives more in total compensation than the median of a group of companies in the same market, and of similar size to Reliance Steel & Aluminum Co. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Reliance Steel & Aluminum has changed over time.
Is Reliance Steel & Aluminum Co Growing?
Reliance Steel & Aluminum Co has increased its earnings per share (EPS) by an average of 40% a year, over the last three years It achieved revenue growth of 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. IThis sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Reliance Steel & Aluminum Co Been A Good Investment?
Most shareholders would probably be pleased with Reliance Steel & Aluminum Co for providing a total return of 48% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We examined the amount Reliance Steel & Aluminum Co pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Reliance Steel & Aluminum.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
