Howard Woltz became the CEO of Insteel Industries, Inc. (NASDAQ:IIIN) in 1991. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Howard Woltz’s Compensation Compare With Similar Sized Companies?
According to our data, Insteel Industries, Inc. has a market capitalization of US$360m, and pays its CEO total annual compensation worth US$2.3m. (This number is for the twelve months until September 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$607k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.
So Howard Woltz receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Insteel Industries has changed over time.
Is Insteel Industries, Inc. Growing?
Over the last three years Insteel Industries, Inc. has shrunk its earnings per share by an average of 14% per year (measured with a line of best fit). In the last year, its revenue is up 8.2%.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Insteel Industries, Inc. Been A Good Investment?
Given the total loss of 40% over three years, many shareholders in Insteel Industries, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Howard Woltz is paid around what is normal the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it’s wise for the company to pay any more, before returns improve. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Insteel Industries.
If you want to buy a stock that is better than Insteel Industries, this free list of high return, low debt companies is a great place to look.
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