Phil Horlock became the CEO of Blue Bird Corporation (NASDAQ:BLBD) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Blue Bird
How Does Total Compensation For Phil Horlock Compare With Other Companies In The Industry?
Our data indicates that Blue Bird Corporation has a market capitalization of US$555m, and total annual CEO compensation was reported as US$2.0m for the year to October 2020. Notably, that's a decrease of 42% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$787k.
On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.8m. From this we gather that Phil Horlock is paid around the median for CEOs in the industry. What's more, Phil Horlock holds US$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$787k | US$800k | 39% |
| Other | US$1.2m | US$2.7m | 61% |
| Total Compensation | US$2.0m | US$3.5m | 100% |
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. Blue Bird pays out 39% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Blue Bird Corporation's Growth Numbers
Over the last three years, Blue Bird Corporation has shrunk its earnings per share by 17% per year. Its revenue is down 14% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Blue Bird Corporation Been A Good Investment?
Given the total shareholder loss of 3.1% over three years, many shareholders in Blue Bird Corporation 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...
As we noted earlier, Blue Bird pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Blue Bird you should be aware of, and 3 of them are a bit concerning.
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.
If you’re looking to trade Blue Bird, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
If you're looking to trade Blue Bird, open an account with the lowest-cost platform trusted by professionals, Interactive Brokers.
With clients in over 200 countries and territories, and access to 160 markets, IBKR lets you trade stocks, options, futures, forex, bonds and funds from a single integrated account.
Enjoy no hidden fees, no account minimums, and FX conversion rates as low as 0.03%, far better than what most brokers offer.
Sponsored ContentValuation is complex, but we're here to simplify it.
Discover if Blue Bird might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisThis 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About NasdaqGM:BLBD
Blue Bird
Designs, engineers, manufactures, and sells school buses in the United States, Canada, and internationally.
Flawless balance sheet and undervalued.
Similar Companies
Market Insights
Community Narratives
