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Kirk Meche has been the CEO of Gulf Island Fabrication, Inc. (NASDAQ:GIFI) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
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How Does Kirk Meche's Compensation Compare With Similar Sized Companies?
Our data indicates that Gulf Island Fabrication, Inc. is worth US$127m, and total annual CEO compensation is US$2.1m. (This number is for the twelve months until December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$483k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$448k.
Thus we can conclude that Kirk Meche receives more in total compensation than the median of a group of companies in the same market, and of similar size to Gulf Island Fabrication, Inc.. 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.
The graphic below shows how CEO compensation at Gulf Island Fabrication has changed from year to year.
Is Gulf Island Fabrication, Inc. Growing?
Over the last three years Gulf Island Fabrication, Inc. has shrunk its earnings per share by an average of 27% per year (measured with a line of best fit). Its revenue is up 22% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Gulf Island Fabrication, Inc. Been A Good Investment?
With a total shareholder return of 23% over three years, Gulf Island Fabrication, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Gulf Island Fabrication, Inc. 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.
We think many shareholders would be underwhelmed with the business growth over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! Whatever your view on compensation, you might want to check if insiders are buying or selling Gulf Island Fabrication 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 email@example.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.