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This article will reflect on the compensation paid to Matt Missad who has served as CEO of UFP Industries, Inc. (NASDAQ:UFPI) since 2011. This analysis will also assess whether UFP Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing UFP Industries, Inc.'s CEO Compensation With the industry
Our data indicates that UFP Industries, Inc. has a market capitalization of US$3.2b, and total annual CEO compensation was reported as US$4.9m for the year to December 2019. We note that's an increase of 31% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$793k.
On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.0m. From this we gather that Matt Missad is paid around the median for CEOs in the industry. Moreover, Matt Missad also holds US$14m worth of UFP Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. UFP Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at UFP Industries, Inc.'s Growth Numbers
UFP Industries, Inc. has seen its earnings per share (EPS) increase by 27% a year over the past three years. It achieved revenue growth of 8.0% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has UFP Industries, Inc. Been A Good Investment?
Most shareholders would probably be pleased with UFP Industries, Inc. for providing a total return of 44% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, UFP Industries, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for UFP Industries that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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