Performance at PGT Innovations, Inc. (NYSE:PGTI) has been reasonably good and CEO Jeff Jackson has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20 May 2021. Here is our take on why we think the CEO compensation looks appropriate.
How Does Total Compensation For Jeff Jackson Compare With Other Companies In The Industry?
Our data indicates that PGT Innovations, Inc. has a market capitalization of US$1.5b, and total annual CEO compensation was reported as US$3.3m for the year to January 2021. We note that's an increase of 31% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$784k.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$4.5m. This suggests that Innovations remunerates its CEO largely in line with the industry average. Furthermore, Jeff Jackson directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Innovations pays out 24% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
PGT Innovations, Inc.'s Growth
PGT Innovations, Inc. has reduced its earnings per share by 4.9% a year over the last three years. In the last year, its revenue is up 18%.
The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has PGT Innovations, Inc. Been A Good Investment?
PGT Innovations, Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Innovations (1 doesn't sit too well with us!) that you should be aware of before investing here.
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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