Some Shareholders May find It Hard To Increase Universal Technical Institute, Inc.'s (NYSE:UTI) CEO Compensation This Year
Key Insights
Universal Technical Institute to hold its Annual General Meeting on 2nd of March
Total pay for CEO Jerome Grant includes US$519.2k salary
Total compensation is similar to the industry average
Universal Technical Institute's total shareholder return over the past three years was 3.5% while its EPS grew by 46% over the past three years
CEO Jerome Grant has done a decent job of delivering relatively good performance at Universal Technical Institute, Inc. (NYSE:UTI) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 2nd of March. We present our case of why we think CEO compensation looks fair.
Check out our latest analysis for Universal Technical Institute
How Does Total Compensation For Jerome Grant Compare With Other Companies In The Industry?
At the time of writing, our data shows that Universal Technical Institute, Inc. has a market capitalization of US$260m, and reported total annual CEO compensation of US$1.9m for the year to September 2022. We note that's a decrease of 15% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$519k.
In comparison with other companies in the American Consumer Services industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.9m. This suggests that Universal Technical Institute remunerates its CEO largely in line with the industry average. Furthermore, Jerome Grant directly owns US$834k worth of shares in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$519k | US$500k | 28% |
Other | US$1.4m | US$1.7m | 72% |
Total Compensation | US$1.9m | US$2.2m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. According to our research, Universal Technical Institute has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Universal Technical Institute, Inc.'s Growth
Universal Technical Institute, Inc. has seen its earnings per share (EPS) increase by 46% a year over the past three years. Its revenue is up 19% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Universal Technical Institute, Inc. Been A Good Investment?
With a total shareholder return of 3.5% over three years, Universal Technical Institute, Inc. has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
In Summary...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Universal Technical Institute that investors should look into moving forward.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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