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How Should Investors React To BlueLinx Holdings Inc’s (NYSE:BXC) CEO Pay?

Mitch Lewis has been the CEO of BlueLinx Holdings Inc (NYSE:BXC) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for BlueLinx Holdings

How Does Mitch Lewis’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that BlueLinx Holdings Inc has a market cap of US$233m, and is paying total annual CEO compensation of US$3m. We note that’s an increase of 129% above last year. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO compensation was US$909k.

As you can see, Mitch Lewis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean BlueLinx Holdings Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at BlueLinx Holdings has changed over time.

NYSE:BXC CEO Compensation November 8th 18

Is BlueLinx Holdings Inc Growing?

Over the last three years BlueLinx Holdings Inc has grown its earnings per share (EPS) by an average of 106% per year. In the last year, its revenue is up 25%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.

We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has BlueLinx Holdings Inc Been A Good Investment?

I think that the total shareholder return of 245%, over three years, would leave most BlueLinx Holdings Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

We examined the amount BlueLinx Holdings Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at BlueLinx Holdings Inc.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.