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Is Worthington Industries, Inc.'s (NYSE:WOR) CEO Pay Fair?

John McConnell has been the CEO of Worthington Industries, Inc. (NYSE:WOR) since 1993. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Worthington Industries

How Does John McConnell's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Worthington Industries, Inc. has a market cap of US$2.3b, and reported total annual CEO compensation of US$3.7m for the year to May 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$668k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.8m.

So John McConnell receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Worthington Industries has changed from year to year.

NYSE:WOR CEO Compensation, January 21st 2020
NYSE:WOR CEO Compensation, January 21st 2020

Is Worthington Industries, Inc. Growing?

Over the last three years Worthington Industries, Inc. has shrunk its earnings per share by an average of 14% per year (measured with a line of best fit). In the last year, its revenue is down 8.2%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Worthington Industries, Inc. Been A Good Investment?

With a three year total loss of 8.9%, Worthington Industries, Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Remuneration for John McConnell is close enough to the median pay for a CEO of a similar sized company .

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Worthington Industries shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.