Shareholders Will Probably Hold Off On Increasing Natural Alternatives International, Inc.'s (NASDAQ:NAII) CEO Compensation For The Time Being
Key Insights
Natural Alternatives International to hold its Annual General Meeting on 7th of December
CEO Mark LeDoux's total compensation includes salary of US$493.3k
Total compensation is 228% above industry average
Natural Alternatives International's three-year loss to shareholders was 41% while its EPS grew by 17% over the past three years
Shareholders of Natural Alternatives International, Inc. (NASDAQ:NAII) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 7th of December 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. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for Natural Alternatives International
How Does Total Compensation For Mark LeDoux Compare With Other Companies In The Industry?
Our data indicates that Natural Alternatives International, Inc. has a market capitalization of US$36m, and total annual CEO compensation was reported as US$915k for the year to June 2023. That's slightly lower by 4.1% over the previous year. In particular, the salary of US$493.3k, makes up a fairly large portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the American Personal Products industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$279k. Hence, we can conclude that Mark LeDoux is remunerated higher than the industry median. Moreover, Mark LeDoux also holds US$5.6m worth of Natural Alternatives International 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$493k | US$473k | 54% |
Other | US$422k | US$482k | 46% |
Total Compensation | US$915k | US$954k | 100% |
Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Natural Alternatives International pays a modest slice of remuneration through salary, as compared to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Natural Alternatives International, Inc.'s Growth Numbers
Natural Alternatives International, Inc. has seen its earnings per share (EPS) increase by 17% a year over the past three years. In the last year, its revenue is down 18%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Natural Alternatives International, Inc. Been A Good Investment?
The return of -41% over three years would not have pleased Natural Alternatives International, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. 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.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Natural Alternatives International that investors should be aware of in a dynamic business environment.
Switching gears from Natural Alternatives International, 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.
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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.
