Tom Ferguson has been the CEO of AZZ Inc. (NYSE:AZZ) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tom Ferguson’s Compensation Compare With Similar Sized Companies?
Our data indicates that AZZ Inc. is worth US$1.2b, and total annual CEO compensation is US$1.7m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at US$725k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.3m.
So Tom Ferguson receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at AZZ has changed from year to year.
Is AZZ Inc. Growing?
Over the last three years AZZ Inc. has shrunk its earnings per share by an average of 17% per year. Its revenue is up 17% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has AZZ Inc. Been A Good Investment?
With a three year total loss of 11%, AZZ Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Remuneration for Tom Ferguson is close enough to the median pay for a CEO of a similar sized company .
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don’t think the CEO is underpaid! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AZZ.
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.