Yahoo Finance Is Rayonier Inc.'s (NYSE:RYN) CEO Pay Justified?
Dave Nunes became the CEO of Rayonier Inc. (NYSE:RYN) in 2014. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Rayonier
How Does Dave Nunes's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Rayonier Inc. has a market cap of US$2.7b, and reported total annual CEO compensation of US$4.7m for the year to December 2019. We note that's an increase of 8.4% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$775k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$6.0m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Rayonier. On a sector level, around 15% of total compensation represents salary and 85% is other remuneration. So it seems like there isn't a significant difference between Rayonier and the broader market, in terms of salary allocation in the overall compensation package.
That means Dave Nunes receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Rayonier has changed over time.
Is Rayonier Inc. Growing?
Rayonier Inc. has reduced its earnings per share by an average of 39% a year, over the last three years (measured with a line of best fit). Its revenue is down 3.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Rayonier Inc. Been A Good Investment?
Since shareholders would have lost about 15% over three years, some Rayonier Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Remuneration for Dave Nunes is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. This doesn't look great when you consider CEO remuneration is up on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is an important area to keep your eyes on, but we've also identified 4 warning signs for Rayonier (2 are significant!) that you should be aware of before investing here.
If you want to buy a stock that is better than Rayonier, this free list of high return, low debt companies is a great place to look.
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.
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