Reece Kurtenbach became the CEO of Daktronics, Inc. (NASDAQ:DAKT) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Daktronics.
How Does Total Compensation For Reece Kurtenbach Compare With Other Companies In The Industry?
Our data indicates that Daktronics, Inc. has a market capitalization of US$179m, and total annual CEO compensation was reported as US$519k for the year to May 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$451.5k, makes up a huge portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$941k. That is to say, Reece Kurtenbach is paid under the industry median. Moreover, Reece Kurtenbach also holds US$2.0m worth of Daktronics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 35% of total compensation represents salary and 65% is other remuneration. Daktronics pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. 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 Daktronics, Inc.'s Growth Numbers
Daktronics, Inc. has reduced its earnings per share by 59% a year over the last three years. In the last year, its revenue is down 3.9%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. 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 Daktronics, Inc. Been A Good Investment?
With a three year total loss of 59% for the shareholders, Daktronics, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Daktronics, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Daktronics that investors should look into moving forward.
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.
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. 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.
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