A Quick Analysis On Foundation Building Materials' (NYSE:FBM) CEO Salary
Ruben Mendoza is the CEO of Foundation Building Materials, Inc. (NYSE:FBM), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Foundation Building Materials pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Foundation Building Materials
Comparing Foundation Building Materials, Inc.'s CEO Compensation With the industry
According to our data, Foundation Building Materials, Inc. has a market capitalization of US$681m, and paid its CEO total annual compensation worth US$4.0m over the year to December 2019. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$750k.
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$4.0m. This suggests that Foundation Building Materials remunerates its CEO largely in line with the industry average. Moreover, Ruben Mendoza also holds US$3.5m worth of Foundation Building Materials stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$750k | US$750k | 19% |
Other | US$3.2m | US$2.5m | 81% |
Total Compensation | US$4.0m | US$3.3m | 100% |
Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Foundation Building Materials sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Foundation Building Materials, Inc.'s Growth Numbers
Over the past three years, Foundation Building Materials, Inc. has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is down 2.0%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Foundation Building Materials, Inc. Been A Good Investment?
With a total shareholder return of 18% over three years, Foundation Building Materials, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, Foundation Building Materials, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Foundation Building Materials that investors should be aware of in a dynamic business environment.
Switching gears from Foundation Building Materials, 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.
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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