Increases to Steel & Tube Holdings Limited's (NZSE:STU) CEO Compensation Might Cool off for now

Key Insights

• Steel & Tube Holdings' Annual General Meeting to take place on 28th of September
• Salary of NZ$875.5k is part of CEO Mark Malpass's total remuneration
• The total compensation is 402% higher than the average for the industry
• Steel & Tube Holdings' total shareholder return over the past three years was 142% while its EPS grew by 93% over the past three years

CEO Mark Malpass has done a decent job of delivering relatively good performance at Steel & Tube Holdings Limited (NZSE:STU) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Steel & Tube Holdings

Comparing Steel & Tube Holdings Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Steel & Tube Holdings Limited has a market capitalization of NZ$191m, and reported total annual CEO compensation of NZ$2.0m for the year to June 2023. Notably, that's an increase of 35% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at NZ$876k.

On comparing similar-sized companies in the New Zealand Metals and Mining industry with market capitalizations below NZ$335m, we found that the median total CEO compensation was NZ$400k. Hence, we can conclude that Mark Malpass is remunerated higher than the industry median. What's more, Mark Malpass holds NZ$690k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	NZ$876k	NZ$795k	44%
Other	NZ$1.1m	NZ$688k	56%
Total Compensation	NZ$2.0m	NZ$1.5m	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. It's interesting to note that Steel & Tube Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Steel & Tube Holdings Limited's Growth

Steel & Tube Holdings Limited's earnings per share (EPS) grew 93% per year over the last three years. It saw its revenue drop 1.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Steel & Tube Holdings Limited Been A Good Investment?

We think that the total shareholder return of 142%, over three years, would leave most Steel & Tube Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Steel & Tube Holdings that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.