Most Shareholders Will Probably Agree With NV5 Global, Inc.'s (NASDAQ:NVEE) CEO Compensation

By
Simply Wall St
Published
May 29, 2021
NasdaqCM:NVEE
Source: Shutterstock

Under the guidance of CEO Dickerson Wright, NV5 Global, Inc. (NASDAQ:NVEE) has performed reasonably well recently. As shareholders go into the upcoming AGM on 05 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for NV5 Global

How Does Total Compensation For Dickerson Wright Compare With Other Companies In The Industry?

Our data indicates that NV5 Global, Inc. has a market capitalization of US$1.4b, and total annual CEO compensation was reported as US$1.7m for the year to January 2021. Notably, that's a decrease of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$632k.

On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$2.2m. This suggests that NV5 Global remunerates its CEO largely in line with the industry average. Moreover, Dickerson Wright also holds US$179m worth of NV5 Global stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212019Proportion (2021)
Salary US$632k US$574k 38%
Other US$1.0m US$1.3m 62%
Total CompensationUS$1.7m US$1.9m100%

Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. It's interesting to note that NV5 Global pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NasdaqCM:NVEE CEO Compensation May 30th 2021

A Look at NV5 Global, Inc.'s Growth Numbers

Over the last three years, NV5 Global, Inc. has shrunk its earnings per share by 11% per year. In the last year, its revenue is up 16%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 NV5 Global, Inc. Been A Good Investment?

We think that the total shareholder return of 43%, over three years, would leave most NV5 Global, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for NV5 Global that investors should be aware of in a dynamic business environment.

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.

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