We Think Some Shareholders May Hesitate To Increase Eagle Bulk Shipping Inc.'s (NASDAQ:EGLE) CEO Compensation

Despite Eagle Bulk Shipping Inc.'s (NASDAQ:EGLE) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 18 June 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Eagle Bulk Shipping

How Does Total Compensation For Gary Vogel Compare With Other Companies In The Industry?

At the time of writing, our data shows that Eagle Bulk Shipping Inc. has a market capitalization of US$606m, and reported total annual CEO compensation of US$1.7m for the year to December 2020. That's a notable decrease of 35% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$675k.

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$562k. Accordingly, our analysis reveals that Eagle Bulk Shipping Inc. pays Gary Vogel north of the industry median. Moreover, Gary Vogel also holds US$8.2m worth of Eagle Bulk Shipping stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. It's interesting to note that Eagle Bulk Shipping pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Eagle Bulk Shipping Inc.'s Growth

Over the last three years, Eagle Bulk Shipping Inc. has shrunk its earnings per share by 38% per year. It achieved revenue growth of 2.8% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Eagle Bulk Shipping Inc. Been A Good Investment?

With a total shareholder return of 21% over three years, Eagle Bulk Shipping Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Eagle Bulk Shipping that investors should look into moving forward.

Switching gears from Eagle Bulk Shipping, 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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