Bill Griffiths became the CEO of Quanex Building Products Corporation (NYSE:NX) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Bill Griffiths's Compensation Compare With Similar Sized Companies?
According to our data, Quanex Building Products Corporation has a market capitalization of US$581m, and pays its CEO total annual compensation worth US$4.0m. (This number is for the twelve months until October 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$815k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.9m.
As you can see, Bill Griffiths is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Quanex Building Products Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Quanex Building Products has changed from year to year.
Is Quanex Building Products Corporation Growing?
Over the last three years Quanex Building Products Corporation has grown its earnings per share (EPS) by an average of 30% per year (using a line of best fit). Its revenue is up 3.5% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Quanex Building Products Corporation Been A Good Investment?
With a three year total loss of 8.5%, Quanex Building Products Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Quanex Building Products Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Quanex Building Products 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.
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