Shareholders May Be More Conservative With Haynes International, Inc.'s (NASDAQ:HAYN) CEO Compensation For Now
Despite Haynes International, Inc.'s (NASDAQ:HAYN) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22 February 2022. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Haynes International
Comparing Haynes International, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Haynes International, Inc. has a market capitalization of US$481m, and reported total annual CEO compensation of US$2.5m for the year to September 2021. We note that's an increase of 22% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$604k.
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$1.1m. This suggests that Michael Shor is paid more than the median for the industry. Furthermore, Michael Shor directly owns US$2.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | US$604k | US$607k | 24% |
Other | US$1.9m | US$1.4m | 76% |
Total Compensation | US$2.5m | US$2.0m | 100% |
Speaking on an industry level, nearly 33% of total compensation represents salary, while the remainder of 67% is other remuneration. In Haynes International's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Haynes International, Inc.'s Growth Numbers
Over the last three years, Haynes International, Inc. has shrunk its earnings per share by 66% per year. Its revenue is up 6.0% over the last year.
The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Haynes International, Inc. Been A Good Investment?
Haynes International, Inc. has served shareholders reasonably well, with a total return of 25% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Haynes International that you should be aware of before investing.
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.
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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.
