It Looks Like Hydrofarm Holdings Group, Inc.'s (NASDAQ:HYFM) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Hydrofarm Holdings Group to hold its Annual General Meeting on 6th of June
• Salary of US$600.0k is part of CEO Bill Toler's total remuneration
• The overall pay is 63% above the industry average
• Hydrofarm Holdings Group's EPS declined by 40% over the past three years while total shareholder loss over the past three years was 99%

Shareholders will probably not be too impressed with the underwhelming results at Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) recently. At the upcoming AGM on 6th of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Hydrofarm Holdings Group

Comparing Hydrofarm Holdings Group, Inc.'s CEO Compensation With The Industry

According to our data, Hydrofarm Holdings Group, Inc. has a market capitalization of US$36m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2023. Notably, that's a decrease of 53% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$600k.

For comparison, other companies in the American Machinery industry with market capitalizations below US$200m, reported a median total CEO compensation of US$888k. Accordingly, our analysis reveals that Hydrofarm Holdings Group, Inc. pays Bill Toler north of the industry median. Furthermore, Bill Toler directly owns US$1.3m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$600k	US$600k	41%
Other	US$848k	US$2.5m	59%
Total Compensation	US$1.4m	US$3.1m	100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Hydrofarm Holdings Group pays out a greater portion of remuneration through salary, compared to the industry. 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 Hydrofarm Holdings Group, Inc.'s Growth Numbers

Over the last three years, Hydrofarm Holdings Group, Inc. has shrunk its earnings per share by 40% per year. Its revenue is down 26% 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 Hydrofarm Holdings Group, Inc. Been A Good Investment?

The return of -99% over three years would not have pleased Hydrofarm Holdings Group, Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

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.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Hydrofarm Holdings Group that investors should look into moving forward.

Important note: Hydrofarm Holdings Group 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.