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Tom Brisbin became the CEO of Willdan Group, Inc. (NASDAQ:WLDN) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Willdan Group.
How Does Total Compensation For Tom Brisbin Compare With Other Companies In The Industry?
At the time of writing, our data shows that Willdan Group, Inc. has a market capitalization of US$459m, and reported total annual CEO compensation of US$2.6m for the year to December 2019. That's a notable decrease of 37% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$448k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.4m. This suggests that Willdan Group remunerates its CEO largely in line with the industry average. What's more, Tom Brisbin holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. Willdan Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Willdan Group, Inc.'s Growth
Willdan Group, Inc. has reduced its earnings per share by 85% a year over the last three years. It achieved revenue growth of 5.1% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Willdan Group, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Willdan Group, Inc. for providing a total return of 52% over three years. 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.
As previously discussed, Tom is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you see that EPS growth over the last three years has been negative. On the other hand, shareholder returns are showing positive trends over the same time frame. We do not think CEO compensation is a problem, but shrinking EPS is undoubtedly an issue that will have to be addressed.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Willdan Group that investors should be aware of in a dynamic business environment.
Switching gears from Willdan Group, 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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