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Is Insteel Industries, Inc.'s (NASDAQ:IIIN) CEO Paid Enough Relative To Peers?

Simply Wall St

In 1991 Howard Woltz was appointed CEO of Insteel Industries, Inc. (NASDAQ:IIIN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Insteel Industries

How Does Howard Woltz's Compensation Compare With Similar Sized Companies?

According to our data, Insteel Industries, Inc. has a market capitalization of US$417m, and paid its CEO total annual compensation worth US$1.8m over the year to September 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$635k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.

That means Howard Woltz receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Insteel Industries has changed from year to year.

NasdaqGS:IIIN CEO Compensation, January 15th 2020

Is Insteel Industries, Inc. Growing?

On average over the last three years, Insteel Industries, Inc. has shrunk earnings per share by 22% each year (measured with a line of best fit). In the last year, its revenue changed by just 0.6%.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?

Given the total loss of 35% over three years, many shareholders in Insteel Industries, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Howard Woltz is paid around the same as most CEOs of similar size companies.

The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Insteel Industries (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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