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In 2013 Reece Kurtenbach was appointed CEO of Daktronics, Inc. (NASDAQ:DAKT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 Reece Kurtenbach's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Daktronics, Inc. has a market cap of US$285m, and is paying total annual CEO compensation of US$527k. (This is based on the year to April 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$428k. 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$1.2m.
Most shareholders would consider it a positive that Reece Kurtenbach takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Daktronics has changed over time.
Is Daktronics, Inc. Growing?
Daktronics, Inc. has reduced its earnings per share by an average of 21% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -6.7%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Daktronics, Inc. Been A Good Investment?
With a total shareholder return of 5.4% over three years, Daktronics, Inc. has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Daktronics, Inc. is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Reece Kurtenbach is under the median of a group of similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don't see the CEO pay as a big issue here. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Daktronics.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.