Is Hawkins, Inc. (NASDAQ:HWKN) Overpaying Its CEO?
Patrick Hawkins became the CEO of Hawkins, Inc. (NASDAQ:HWKN) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Hawkins
How Does Patrick Hawkins's Compensation Compare With Similar Sized Companies?
According to our data, Hawkins, Inc. has a market capitalization of US$414m, and paid its CEO total annual compensation worth US$1.5m over the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$425k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$2.3m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 19% of total compensation out of all the companies we analysed, while other remuneration made up 81% of the pie. It's interesting to note that Hawkins pays out a greater portion of remuneration through salary, in comparison to the wider industry.
Most shareholders would consider it a positive that Patrick Hawkins takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see a visual representation of the CEO compensation at Hawkins, below.
Is Hawkins, Inc. Growing?
Hawkins, Inc. has seen earnings per share (EPS) move positively by an average of 15% a year, over the last three years (using a line of best fit). It saw its revenue drop 2.9% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Hawkins, Inc. Been A Good Investment?
Given the total loss of 12% over three years, many shareholders in Hawkins, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Hawkins, Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Patrick Hawkins is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Taking a breather from CEO compensation, we've spotted 2 warning signs for Hawkins (of which 1 can't be ignored!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than Hawkins, 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. 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. Thank you for reading.