We Think Avery Dennison Corporation's (NYSE:AVY) CEO Compensation Looks Fair

The performance at Avery Dennison Corporation (NYSE:AVY) has been quite strong recently and CEO Mitch Butier has played a role in it. Coming up to the next AGM on 22 April 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Avery Dennison

How Does Total Compensation For Mitch Butier Compare With Other Companies In The Industry?

Our data indicates that Avery Dennison Corporation has a market capitalization of US$17b, and total annual CEO compensation was reported as US$8.7m for the year to January 2021. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued 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$10m. This suggests that Avery Dennison remunerates its CEO largely in line with the industry average. What's more, Mitch Butier holds US$49m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. Avery Dennison is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Avery Dennison Corporation's Growth Numbers

Avery Dennison Corporation has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is down 1.4%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Avery Dennison Corporation Been A Good Investment?

Boasting a total shareholder return of 95% over three years, Avery Dennison Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Avery Dennison that investors should be aware of in a dynamic business environment.

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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