We Think Some Shareholders May Hesitate To Increase Northwest Pipe Company's (NASDAQ:NWPX) CEO Compensation

Under the guidance of CEO Scott Montross, Northwest Pipe Company (NASDAQ:NWPX) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10 June 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Northwest Pipe

Comparing Northwest Pipe Company's CEO Compensation With the industry

Our data indicates that Northwest Pipe Company has a market capitalization of US$308m, and total annual CEO compensation was reported as US$2.0m for the year to December 2020. We note that's a small decrease of 3.7% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$577k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.5m. This suggests that Scott Montross is paid more than the median for the industry. What's more, Scott Montross holds US$2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$577k	US$550k	29%
Other	US$1.4m	US$1.5m	71%
Total Compensation	US$2.0m	US$2.0m	100%

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. According to our research, Northwest Pipe has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Northwest Pipe Company's Growth Numbers

Northwest Pipe Company has seen its earnings per share (EPS) increase by 38% a year over the past three years. In the last year, its revenue is up 1.3%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Northwest Pipe Company Been A Good Investment?

Boasting a total shareholder return of 47% over three years, Northwest Pipe Company has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Northwest Pipe.

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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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