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Mike Callahan became the CEO of GMS Inc. (NYSE:GMS) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for GMS

How Does Mike Callahan's Compensation Compare With Similar Sized Companies?

According to our data, GMS Inc. has a market capitalization of US$745m, and pays its CEO total annual compensation worth US$1.2m. (This is based on the year to April 2018). While we always look at total compensation first, we note that the salary component is less, at US$750k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.

Most shareholders would consider it a positive that Mike Callahan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

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

Is GMS Inc. Growing?

On average over the last three years, GMS Inc. has grown earnings per share (EPS) by 35% each year (using a line of best fit). Its revenue is up 19% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has GMS Inc. Been A Good Investment?

Since shareholders would have lost about 14% over three years, some GMS Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like GMS Inc. pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we don't think, Mike Callahan is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.

When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at GMS.

Important note: GMS may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.