Under the guidance of CEO Carlos Rodriguez, Automatic Data Processing, Inc. (NASDAQ:ADP) 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 10 November 2021. However, some shareholders may still want to keep CEO compensation within reason.
How Does Total Compensation For Carlos Rodriguez Compare With Other Companies In The Industry?
According to our data, Automatic Data Processing, Inc. has a market capitalization of US$95b, and paid its CEO total annual compensation worth US$17m over the year to June 2021. That's slightly lower by 3.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$942k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$9.6m. Accordingly, our analysis reveals that Automatic Data Processing, Inc. pays Carlos Rodriguez north of the industry median. Moreover, Carlos Rodriguez also holds US$26m worth of Automatic Data Processing stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | US$942k | US$989k | 6% |
| Other | US$16m | US$17m | 94% |
| Total Compensation | US$17m | US$18m | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Automatic Data Processing sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Automatic Data Processing, Inc.'s Growth Numbers
Automatic Data Processing, Inc. has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is up 5.5%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Automatic Data Processing, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Automatic Data Processing, Inc. for providing a total return of 62% 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...
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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Automatic Data Processing that investors should think about before committing capital to this stock.
Switching gears from Automatic Data Processing, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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