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Howard Woltz became the CEO of Insteel Industries, Inc. (NASDAQ:IIIN) in 1991, 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 Insteel Industries.
Comparing Insteel Industries, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Insteel Industries, Inc. has a market capitalization of US$589m, and reported total annual CEO compensation of US$2.0m for the year to September 2020. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$659k.
For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$592k. Accordingly, our analysis reveals that Insteel Industries, Inc. pays Howard Woltz north of the industry median. What's more, Howard Woltz holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. According to our research, Insteel Industries has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Insteel Industries, Inc.'s Growth Numbers
Earnings per share at Insteel Industries, Inc. are much the same as they were three years ago, albeit with slightly higher. It achieved revenue growth of 10% over the last year.
This revenue growth could really point to a brighter future. And, while modest, the EPS growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Insteel Industries, Inc. Been A Good Investment?
Insteel Industries, Inc. has served shareholders reasonably well, with a total return of 11% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, Insteel Industries, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS growth is not moving in the right direction, and the returns to shareholders could have been better, over the last three years. We'd stop short of saying CEO pay is inappropriate, but we'd like to see healthier business growth from the company, moving forward.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Insteel Industries that investors should think about before committing capital to this stock.
Switching gears from Insteel Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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