This article will reflect on the compensation paid to Ward Nye who has served as CEO of Martin Marietta Materials, Inc. (NYSE:MLM) since 2010. This analysis will also assess whether Martin Marietta Materials pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Martin Marietta Materials, Inc.'s CEO Compensation With the industry
Our data indicates that Martin Marietta Materials, Inc. has a market capitalization of US$13b, and total annual CEO compensation was reported as US$12m for the year to December 2019. We note that's an increase of 43% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$2.8m. Accordingly, our analysis reveals that Martin Marietta Materials, Inc. pays Ward Nye north of the industry median. What's more, Ward Nye holds US$37m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. In Martin Marietta Materials' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Martin Marietta Materials, Inc.'s Growth Numbers
Over the past three years, Martin Marietta Materials, Inc. has seen its earnings per share (EPS) grow by 13% per year. In the last year, its revenue is up 6.1%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Martin Marietta Materials, Inc. Been A Good Investment?
Martin Marietta Materials, Inc. has not done too badly by shareholders, with a total return of 5.6%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As previously discussed, Ward is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong over three years. We also think investor returns are steady over the same time period. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.
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 3 warning signs for Martin Marietta Materials that investors should think about before committing capital to this stock.
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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