We Discuss Why Great Lakes Dredge & Dock Corporation's (NASDAQ:GLDD) CEO Compensation May Be Closely Reviewed

Key Insights

• Great Lakes Dredge & Dock's Annual General Meeting to take place on 9th of May
• Total pay for CEO Lasse Petterson includes US$785.0k salary
• Total compensation is 34% above industry average
• Great Lakes Dredge & Dock's EPS declined by 41% over the past three years while total shareholder loss over the past three years was 51%

Shareholders will probably not be too impressed with the underwhelming results at Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Great Lakes Dredge & Dock

Comparing Great Lakes Dredge & Dock Corporation's CEO Compensation With The Industry

According to our data, Great Lakes Dredge & Dock Corporation has a market capitalization of US$456m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2023. We note that's a decrease of 15% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$785k.

On comparing similar companies from the American Construction industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.4m. Accordingly, our analysis reveals that Great Lakes Dredge & Dock Corporation pays Lasse Petterson north of the industry median. Moreover, Lasse Petterson also holds US$6.3m worth of Great Lakes Dredge & Dock stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$785k	US$785k	24%
Other	US$2.4m	US$3.0m	76%
Total Compensation	US$3.2m	US$3.8m	100%

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Great Lakes Dredge & Dock is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Great Lakes Dredge & Dock Corporation's Growth

Great Lakes Dredge & Dock Corporation has reduced its earnings per share by 41% a year over the last three years. In the last year, its revenue is down 9.1%.

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 Great Lakes Dredge & Dock Corporation Been A Good Investment?

Few Great Lakes Dredge & Dock Corporation shareholders would feel satisfied with the return of -51% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is concerning) in Great Lakes Dredge & Dock we think you should know about.

Important note: Great Lakes Dredge & Dock 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.

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.