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Is Blue Bird Corporation's (NASDAQ:BLBD) CEO Pay Fair?

Simply Wall St

Phil Horlock has been the CEO of Blue Bird Corporation (NASDAQ:BLBD) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Blue Bird

How Does Phil Horlock's Compensation Compare With Similar Sized Companies?

According to our data, Blue Bird Corporation has a market capitalization of US$518m, and paid its CEO total annual compensation worth US$2.5m over the year to September 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.8m.

Thus we can conclude that Phil Horlock receives more in total compensation than the median of a group of companies in the same market, and of similar size to Blue Bird Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Blue Bird has changed over time.

NasdaqGM:BLBD CEO Compensation, October 26th 2019

Is Blue Bird Corporation Growing?

Blue Bird Corporation has increased its earnings per share (EPS) by an average of 56% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.07%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Blue Bird Corporation Been A Good Investment?

With a total shareholder return of 32% over three years, Blue Bird Corporation shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We examined the amount Blue Bird Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Blue Bird shares (free trial).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.