Most Shareholders Will Probably Agree With Blue Bird Corporation's (NASDAQ:BLBD) CEO Compensation

Shareholders may be wondering what CEO Phil Horlock plans to do to improve the less than great performance at Blue Bird Corporation (NASDAQ:BLBD) recently. At the next AGM coming up on 10 March 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

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$688m, and total annual CEO compensation was reported as US$2.0m for the year to October 2020. We note that's a decrease of 42% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$787k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.0m. That is to say, Phil Horlock is paid under the industry median. Moreover, Phil Horlock also holds US$8.4m worth of Blue Bird stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. Blue Bird pays out 39% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Blue Bird Corporation's Growth

Over the last three years, Blue Bird Corporation has shrunk its earnings per share by 21% per year. It saw its revenue drop 16% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Blue Bird Corporation Been A Good Investment?

Blue Bird Corporation has not done too badly by shareholders, with a total return of 5.9%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Blue Bird (2 are significant!) that you should be aware of before investing here.

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.

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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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