Yahoo Finance Shareholders May Be More Conservative With HNI Corporation's (NYSE:HNI) CEO Compensation For Now
Key Insights
HNI will host its Annual General Meeting on 16th of May
Salary of US$1.03m is part of CEO Jeff Lorenger's total remuneration
The total compensation is 56% higher than the average for the industry
HNI's total shareholder return over the past three years was 16% while its EPS was down 9.9% over the past three years
Despite positive share price growth of 16% for HNI Corporation (NYSE:HNI) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 16th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for HNI
Comparing HNI Corporation's CEO Compensation With The Industry
According to our data, HNI Corporation has a market capitalization of US$2.1b, and paid its CEO total annual compensation worth US$7.1m over the year to December 2023. We note that's an increase of 25% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
For comparison, other companies in the American Commercial Services industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.6m. Hence, we can conclude that Jeff Lorenger is remunerated higher than the industry median. Furthermore, Jeff Lorenger directly owns US$9.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$998k | 14% |
Other | US$6.1m | US$4.7m | 86% |
Total Compensation | US$7.1m | US$5.7m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. HNI pays a modest slice of remuneration through salary, as compared 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.
HNI Corporation's Growth
Over the last three years, HNI Corporation has shrunk its earnings per share by 9.9% per year. In the last year, its revenue is up 12%.
The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has HNI Corporation Been A Good Investment?
HNI Corporation has served shareholders reasonably well, with a total return of 16% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 5 warning signs for HNI 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.
