A Quick Analysis On Polaris' (NYSE:PII) CEO Compensation

Simply Wall St
·3-min read

This article will reflect on the compensation paid to Scott Wine who has served as CEO of Polaris Inc. (NYSE:PII) since 2008. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Polaris.

See our latest analysis for Polaris

Comparing Polaris Inc.'s CEO Compensation With the industry

According to our data, Polaris Inc. has a market capitalization of US$5.8b, and paid its CEO total annual compensation worth US$10m over the year to December 2019. Notably, that's an increase of 9.2% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$5.8m. This suggests that Scott Wine is paid more than the median for the industry. Furthermore, Scott Wine directly owns US$30m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$1.0m

10%

Other

US$9.1m

US$8.3m

90%

Total Compensation

US$10m

US$9.3m

100%

On an industry level, roughly 26% of total compensation represents salary and 74% is other remuneration. Polaris sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Polaris Inc.'s Growth

Over the past three years, Polaris Inc. has seen its earnings per share (EPS) grow by 2.0% per year. Its revenue is down 1.9% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Polaris Inc. Been A Good Investment?

Given the total shareholder loss of 2.8% over three years, many shareholders in Polaris Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Polaris pays its CEO higher than the norm for similar-sized companies belonging to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Polaris have arguably been worse, over the last three years. This doesn't look good when you see that Scott is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Scott a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Polaris (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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