Shareholders will probably not be disappointed by the robust results at Taylor Devices, Inc. (NASDAQ:TAYD) recently and they will be keeping this in mind as they go into the AGM on 22 October 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Comparing Taylor Devices, Inc.'s CEO Compensation With the industry
Our data indicates that Taylor Devices, Inc. has a market capitalization of US$40m, and total annual CEO compensation was reported as US$291k for the year to May 2021. That's a notable decrease of 25% on last year. Notably, the salary which is US$250.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$527k. Accordingly, Taylor Devices pays its CEO under the industry median.
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. Taylor Devices is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Taylor Devices, Inc.'s Growth Numbers
Over the past three years, Taylor Devices, Inc. has seen its earnings per share (EPS) grow by 6.3% per year. Its revenue is down 15% over the previous year.
We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Taylor Devices, Inc. Been A Good Investment?
With a total shareholder return of 0.8% over three years, Taylor Devices, Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which shouldn't be ignored) in Taylor Devices we think you should know about.
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. 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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