Shareholders Would Not Be Objecting To Universal Technical Institute, Inc.'s (NYSE:UTI) CEO Compensation And Here's Why
Key Insights
Universal Technical Institute's Annual General Meeting to take place on 7th of March
Total pay for CEO Jerome Grant includes US$580.8k salary
The overall pay is comparable to the industry average
Over the past three years, Universal Technical Institute's EPS grew by 29% and over the past three years, the total shareholder return was 149%
We have been pretty impressed with the performance at Universal Technical Institute, Inc. (NYSE:UTI) recently and CEO Jerome Grant deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 7th of March. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
View our latest analysis for Universal Technical Institute
Comparing Universal Technical Institute, Inc.'s CEO Compensation With The Industry
Our data indicates that Universal Technical Institute, Inc. has a market capitalization of US$791m, and total annual CEO compensation was reported as US$3.0m for the year to September 2023. We note that's an increase of 58% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$581k.
On comparing similar companies from the American Consumer Services industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$3.7m. So it looks like Universal Technical Institute compensates Jerome Grant in line with the median for the industry. Moreover, Jerome Grant also holds US$3.1m worth of Universal Technical Institute stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$581k | US$519k | 20% |
Other | US$2.4m | US$1.4m | 80% |
Total Compensation | US$3.0m | US$1.9m | 100% |
Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. There isn't a significant difference between Universal Technical Institute and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Universal Technical Institute, Inc.'s Growth
Universal Technical Institute, Inc. has seen its earnings per share (EPS) increase by 29% a year over the past three years. In the last year, its revenue is up 53%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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?
Boasting a total shareholder return of 149% over three years, Universal Technical Institute, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
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 1 warning sign for Universal Technical Institute that investors should look into moving forward.
Important note: Universal Technical Institute is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
