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This article will reflect on the compensation paid to Steve Sintros who has served as CEO of UniFirst Corporation (NYSE:UNF) since 2017. This analysis will also assess whether UniFirst pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing UniFirst Corporation's CEO Compensation With the industry
At the time of writing, our data shows that UniFirst Corporation has a market capitalization of US$3.9b, and reported total annual CEO compensation of US$2.6m for the year to August 2020. We note that's a small decrease of 4.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$750k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$4.6m. In other words, UniFirst pays its CEO lower than the industry median. What's more, Steve Sintros holds US$1.1m worth of shares in the company in their own name.
Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. UniFirst pays out 29% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at UniFirst Corporation's Growth Numbers
Over the past three years, UniFirst Corporation has seen its earnings per share (EPS) grow by 28% per year. In the last year, its revenue changed by just 0.3%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 UniFirst Corporation Been A Good Investment?
UniFirst Corporation has served shareholders reasonably well, with a total return of 28% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Steve is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Meanwhile, EPS growth has been rock solid for the past three years. Unfortunately, although shareholder returns are growing, they haven't impressed us as much in comparison, over the same period. Shareholder returns could be better but we're pleased with the positive EPS growth. As a result of these considerations, CEO compensation seems quite appropriate.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at UniFirst.
Switching gears from UniFirst, 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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