How Is Enerpac Tool Group's (NYSE:EPAC) CEO Paid Relative To Peers?
Randy Baker became the CEO of Enerpac Tool Group Corp. (NYSE:EPAC) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Enerpac Tool Group.
Check out our latest analysis for Enerpac Tool Group
How Does Total Compensation For Randy Baker Compare With Other Companies In The Industry?
Our data indicates that Enerpac Tool Group Corp. has a market capitalization of US$1.2b, and total annual CEO compensation was reported as US$3.9m for the year to August 2019. That's a notable decrease of 16% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$867k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.4m. This suggests that Enerpac Tool Group remunerates its CEO largely in line with the industry average. Furthermore, Randy Baker directly owns US$1.5m worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$867k | US$867k | 22% |
Other | US$3.0m | US$3.8m | 78% |
Total Compensation | US$3.9m | US$4.7m | 100% |
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. It's interesting to note that Enerpac Tool Group pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Enerpac Tool Group Corp.'s Growth
Over the last three years, Enerpac Tool Group Corp. has shrunk its earnings per share by 65% per year. Its revenue is up 107% over the last year.
The decrease in earnings could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Enerpac Tool Group Corp. Been A Good Investment?
With a three year total loss of 18% for the shareholders, Enerpac Tool Group Corp. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Enerpac Tool Group pays its CEO in line with similar-sized companies belonging to the same industry. However, revenues have increased over the past year, a positive sign for the company. On the other hand, shareholder returns for Randy are negative over the same period. EPS is also not growing, undoubtedly leading to further headaches. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.
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 3 warning signs (and 1 which is significant) in Enerpac Tool Group we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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