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The underwhelming share price performance of Orion Group Holdings, Inc. (NYSE:ORN) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 20 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Mark Stauffer Compare With Other Companies In The Industry?
According to our data, Orion Group Holdings, Inc. has a market capitalization of US$171m, and paid its CEO total annual compensation worth US$2.0m over the year to December 2020. Notably, that's an increase of 86% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$570k.
For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.2m. This suggests that Mark Stauffer is paid more than the median for the industry. Moreover, Mark Stauffer also holds US$3.9m worth of Orion Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Orion Group Holdings pays out 29% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Orion Group Holdings, Inc.'s Growth Numbers
Orion Group Holdings, Inc. has seen its earnings per share (EPS) increase by 39% a year over the past three years. It saw its revenue drop 4.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Orion Group Holdings, Inc. Been A Good Investment?
Given the total shareholder loss of 23% over three years, many shareholders in Orion Group Holdings, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Orion Group Holdings that investors should look into moving forward.
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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