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Is Hammond Manufacturing Company Limited's (TSE:HMM.A) CEO Pay Fair?

Simply Wall St

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In 1978 Rob Hammond was appointed CEO of Hammond Manufacturing Company Limited ( TSE:HMM.A ). First, this article will compare CEO compensation with compensation at similar sized companies. 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 Hammond Manufacturing

How Does Rob Hammond's Compensation Compare With Similar Sized Companies?

Our data indicates that Hammond Manufacturing Company Limited is worth CA$23m, and total annual CEO compensation is CA$333k. (This is based on the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$320k. We looked at a group of companies with market capitalizations under CA$261m, and the median CEO total compensation was CA$120k.

Thus we can conclude that Rob Hammond receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hammond Manufacturing Company Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

TSX:HMM.A CEO Compensation, July 15th 2019

Is Hammond Manufacturing Company Limited Growing?

Hammond Manufacturing Company Limited has increased its earnings per share (EPS) by an average of 24% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hammond Manufacturing Company Limited Been A Good Investment?

Since shareholders would have lost about 9.4% over three years, some Hammond Manufacturing Company Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Hammond Manufacturing Company Limited, 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.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if Hammond Manufacturing insiders are buying or selling shares.

If you want to buy a stock that is better than Hammond Manufacturing, this free list of high return, low debt companies is a great place to look.

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.