Yahoo Finance Shareholders Would Not Be Objecting To Steel Dynamics, Inc.'s (NASDAQ:STLD) CEO Compensation And Here's Why
Key Insights
Steel Dynamics will host its Annual General Meeting on 9th of May
CEO Mark Millett's total compensation includes salary of US$1.49m
The overall pay is comparable to the industry average
Over the past three years, Steel Dynamics' EPS grew by 59% and over the past three years, the total shareholder return was 123%
We have been pretty impressed with the performance at Steel Dynamics, Inc. (NASDAQ:STLD) recently and CEO Mark Millett deserves a mention for their role in it. Coming up to the next AGM on 9th of May, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Check out our latest analysis for Steel Dynamics
How Does Total Compensation For Mark Millett Compare With Other Companies In The Industry?
At the time of writing, our data shows that Steel Dynamics, Inc. has a market capitalization of US$20b, and reported total annual CEO compensation of US$12m for the year to December 2023. That's just a smallish increase of 5.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.
In comparison with other companies in the American Metals and Mining industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$12m. This suggests that Steel Dynamics remunerates its CEO largely in line with the industry average. Moreover, Mark Millett also holds US$378m worth of Steel Dynamics 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$1.5m | US$1.4m | 13% |
Other | US$10m | US$9.8m | 87% |
Total Compensation | US$12m | US$11m | 100% |
On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. It's interesting to note that Steel Dynamics allocates a smaller portion of compensation to salary in comparison to the broader 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 Steel Dynamics, Inc.'s Growth Numbers
Over the past three years, Steel Dynamics, Inc. has seen its earnings per share (EPS) grow by 59% per year. In the last year, its revenue is down 14%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Steel Dynamics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Steel Dynamics, Inc. for providing a total return of 123% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
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. That's why we did some digging and identified 1 warning sign for Steel Dynamics that you should be aware of before investing.
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.
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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.
