Why We Think The CEO Of Domino's Pizza, Inc. (NYSE:DPZ) May Soon See A Pay Rise

The solid performance at Domino's Pizza, Inc. (NYSE:DPZ) has been impressive and shareholders will probably be pleased to know that CEO Ritch Allison has delivered. This would be kept in mind at the upcoming AGM on 27 April 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Domino's Pizza

How Does Total Compensation For Ritch Allison Compare With Other Companies In The Industry?

At the time of writing, our data shows that Domino's Pizza, Inc. has a market capitalization of US$15b, and reported total annual CEO compensation of US$6.3m for the year to January 2021. That's a notable increase of 15% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$929k.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$13m. Accordingly, Domino's Pizza pays its CEO under the industry median. Moreover, Ritch Allison also holds US$17m worth of Domino's Pizza stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Domino's Pizza pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Domino's Pizza, Inc.'s Growth

Domino's Pizza, Inc. has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is up 14%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Domino's Pizza, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Domino's Pizza, Inc. for providing a total return of 76% 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Domino's Pizza 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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