Is Rocky Mountain Dealerships Inc.’s (TSE:RME) CEO Pay Fair?
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Garrett Andrew Ganden became the CEO of Rocky Mountain Dealerships Inc. (TSE:RME) in 2015. 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 process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Rocky Mountain Dealerships
How Does Garrett Andrew Ganden’s Compensation Compare With Similar Sized Companies?
Our data indicates that Rocky Mountain Dealerships Inc. is worth CA$172m, and total annual CEO compensation is CA$1.4m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$450k. We took a group of companies with market capitalizations below CA$265m, and calculated the median CEO compensation to be CA$157k.
As you can see, Garrett Andrew Ganden is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Rocky Mountain Dealerships Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Rocky Mountain Dealerships, below.
Is Rocky Mountain Dealerships Inc. Growing?
Over the last three years Rocky Mountain Dealerships Inc. has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). It achieved revenue growth of 6.0% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Rocky Mountain Dealerships Inc. Been A Good Investment?
Most shareholders would probably be pleased with Rocky Mountain Dealerships Inc. for providing a total return of 64% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared the total CEO remuneration paid by Rocky Mountain Dealerships Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Rocky Mountain Dealerships shares with their own money (free access).
If you want to buy a stock that is better than Rocky Mountain Dealerships, this free list of high return, low debt companies is a great place to look.
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.
