How Should Investors React To BlueLinx Holdings Inc.'s (NYSE:BXC) CEO Pay?
In 2014 Mitch Lewis was appointed CEO of BlueLinx Holdings Inc. (NYSE:BXC). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for BlueLinx Holdings
How Does Mitch Lewis's Compensation Compare With Similar Sized Companies?
Our data indicates that BlueLinx Holdings Inc. is worth US$240m, and total annual CEO compensation is US$3.4m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$807k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.2m.
As you can see, Mitch Lewis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean BlueLinx Holdings Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at BlueLinx Holdings has changed over time.
Is BlueLinx Holdings Inc. Growing?
BlueLinx Holdings Inc. has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). Its revenue is up 29% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has BlueLinx Holdings Inc. Been A Good Investment?
Boasting a total shareholder return of 184% over three years, BlueLinx Holdings Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at BlueLinx Holdings Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at BlueLinx Holdings.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
