Here's Why Shareholders Should Examine Array Technologies, Inc.'s (NASDAQ:ARRY) CEO Compensation Package More Closely
Key Insights
- Array Technologies' Annual General Meeting to take place on 20th of May
- Total pay for CEO Kevin Hostetler includes US$850.0k salary
- The total compensation is 188% higher than the average for the industry
- Array Technologies' three-year loss to shareholders was 1.3% while its EPS was down 38% over the past three years
Array Technologies, Inc. (NASDAQ:ARRY) has not performed well recently and CEO Kevin Hostetler will probably need to up their game. At the upcoming AGM on 20th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Array Technologies
How Does Total Compensation For Kevin Hostetler Compare With Other Companies In The Industry?
According to our data, Array Technologies, Inc. has a market capitalization of US$908m, and paid its CEO total annual compensation worth US$8.9m over the year to December 2024. That's a notable increase of 55% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.
For comparison, other companies in the American Electrical industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.1m. Hence, we can conclude that Kevin Hostetler is remunerated higher than the industry median. Furthermore, Kevin Hostetler directly owns US$1.0m worth of shares in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$850k | US$850k | 10% |
| Other | US$8.0m | US$4.9m | 90% |
| Total Compensation | US$8.9m | US$5.7m | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that Array Technologies 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.
Array Technologies, Inc.'s Growth
Over the last three years, Array Technologies, Inc. has shrunk its earnings per share by 38% per year. Its revenue is down 21% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Array Technologies, Inc. Been A Good Investment?
Given the total shareholder loss of 1.3% over three years, many shareholders in Array Technologies, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Array Technologies that investors should look into moving forward.
Important note: Array Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.