Yahoo Finance We Think The Dixie Group, Inc.'s (NASDAQ:DXYN) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
Dixie Group will host its Annual General Meeting on 1st of May
Total pay for CEO Dan Frierson includes US$625.0k salary
Total compensation is 90% above industry average
Dixie Group's EPS declined by 61% over the past three years while total shareholder loss over the past three years was 85%
Shareholders will probably not be too impressed with the underwhelming results at The Dixie Group, Inc. (NASDAQ:DXYN) recently. At the upcoming AGM on 1st of May, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for Dixie Group
Comparing The Dixie Group, Inc.'s CEO Compensation With The Industry
According to our data, The Dixie Group, Inc. has a market capitalization of US$7.8m, and paid its CEO total annual compensation worth US$1.2m over the year to December 2023. We note that's an increase of 19% above last year. We note that the salary of US$625.0k makes up a sizeable portion of the total compensation received by the CEO.
On comparing similar-sized companies in the American Consumer Durables industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$610k. Hence, we can conclude that Dan Frierson is remunerated higher than the industry median. Furthermore, Dan Frierson directly owns US$544k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$625k | US$625k | 54% |
Other | US$536k | US$351k | 46% |
Total Compensation | US$1.2m | US$976k | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that Dixie Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at The Dixie Group, Inc.'s Growth Numbers
The Dixie Group, Inc. has reduced its earnings per share by 61% a year over the last three years. It saw its revenue drop 9.0% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The Dixie Group, Inc. Been A Good Investment?
The return of -85% over three years would not have pleased The Dixie Group, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Dixie Group you should be aware of, and 2 of them are significant.
Important note: Dixie Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
