Key Insights

• Home Depot will host its Annual General Meeting on 16th of May
• CEO Ted Decker's total compensation includes salary of US$1.40m
• The overall pay is comparable to the industry average
• Home Depot's total shareholder return over the past three years was 15% while its EPS grew by 8.4% over the past three years

Under the guidance of CEO Ted Decker, The Home Depot, Inc. (NYSE:HD) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 16th of May. Here is our take on why we think the CEO compensation looks appropriate.

How Does Total Compensation For Ted Decker Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Home Depot, Inc. has a market capitalization of US$344b, and reported total annual CEO compensation of US$14m for the year to January 2024. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.4m.

On comparing similar companies in the American Specialty Retail industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. From this we gather that Ted Decker is paid around the median for CEOs in the industry. Moreover, Ted Decker also holds US$40m worth of Home Depot stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Home Depot allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

The Home Depot, Inc.'s Growth

The Home Depot, Inc. has seen its earnings per share (EPS) increase by 8.4% a year over the past three years. In the last year, its revenue is down 3.0%.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 The Home Depot, Inc. Been A Good Investment?

The Home Depot, Inc. has served shareholders reasonably well, with a total return of 15% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Home Depot that investors should think about before committing capital to this stock.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.