Scott Montross has been the CEO of Northwest Pipe Company (NASDAQ:NWPX) since 2013. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Scott Montross’s Compensation Compare With Similar Sized Companies?
According to our data, Northwest Pipe Company has a market capitalization of US$236m, and pays its CEO total annual compensation worth US$621k. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$530k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$993k.
A first glance this seems like a real positive for shareholders, since Scott Montross is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Northwest Pipe has changed from year to year.
Is Northwest Pipe Company Growing?
On average over the last three years, Northwest Pipe Company has grown earnings per share (EPS) by 83% each year (using a line of best fit). It achieved revenue growth of 10% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Northwest Pipe Company Been A Good Investment?
I think that the total shareholder return of 170%, over three years, would leave most Northwest Pipe Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
It looks like Northwest Pipe Company pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Scott Montross deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Northwest Pipe.
If you want to buy a stock that is better than Northwest Pipe, this free list of high return, low debt companies is a great place to look.
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