Yahoo Finance Here's Why We Think Northwest Pipe Company's (NASDAQ:NWPX) CEO Compensation Looks Fair for the time being
Key Insights
Northwest Pipe will host its Annual General Meeting on 13th of June
Salary of US$700.8k is part of CEO Scott Montross's total remuneration
Total compensation is similar to the industry average
Northwest Pipe's EPS grew by 4.6% over the past three years while total shareholder return over the past three years was 10%
CEO Scott Montross has done a decent job of delivering relatively good performance at Northwest Pipe Company (NASDAQ:NWPX) recently. As shareholders go into the upcoming AGM on 13th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
See our latest analysis for Northwest Pipe
How Does Total Compensation For Scott Montross Compare With Other Companies In The Industry?
At the time of writing, our data shows that Northwest Pipe Company has a market capitalization of US$342m, and reported total annual CEO compensation of US$2.4m for the year to December 2023. That's slightly lower by 4.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$701k.
For comparison, other companies in the American Construction industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$2.4m. From this we gather that Scott Montross is paid around the median for CEOs in the industry. Furthermore, Scott Montross directly owns US$4.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$701k | US$643k | 29% |
Other | US$1.7m | US$1.9m | 71% |
Total Compensation | US$2.4m | US$2.5m | 100% |
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. Northwest Pipe pays out 29% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Northwest Pipe Company's Growth
Northwest Pipe Company has seen its earnings per share (EPS) increase by 4.6% a year over the past three years. It achieved revenue growth of 2.5% over the last year.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Northwest Pipe Company Been A Good Investment?
Northwest Pipe Company has generated a total shareholder return of 10% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Northwest Pipe (free visualization of insider trades).
Switching gears from Northwest Pipe, 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.
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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.
