Shareholders May Find It Hard To Justify Increasing Gibraltar Industries, Inc.'s (NASDAQ:ROCK) CEO Compensation For Now

Key Insights

• Gibraltar Industries to hold its Annual General Meeting on 1st of May
• CEO Bill Bosway's total compensation includes salary of US$845.5k
• The total compensation is similar to the average for the industry
• Over the past three years, Gibraltar Industries' EPS grew by 12% and over the past three years, the total loss to shareholders 24%

Shareholders of Gibraltar Industries, Inc. (NASDAQ:ROCK) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 1st of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Gibraltar Industries

Comparing Gibraltar Industries, Inc.'s CEO Compensation With The Industry

Our data indicates that Gibraltar Industries, Inc. has a market capitalization of US$2.2b, and total annual CEO compensation was reported as US$5.5m for the year to December 2023. Notably, that's an increase of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$845k.

For comparison, other companies in the American Building industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$5.2m. So it looks like Gibraltar Industries compensates Bill Bosway in line with the median for the industry. Moreover, Bill Bosway also holds US$6.0m worth of Gibraltar Industries 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$845k	US$825k	15%
Other	US$4.7m	US$3.7m	85%
Total Compensation	US$5.5m	US$4.5m	100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. There isn't a significant difference between Gibraltar Industries and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Gibraltar Industries, Inc.'s Growth

Gibraltar Industries, Inc. has seen its earnings per share (EPS) increase by 12% a year over the past three years. Revenue was pretty flat on last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Gibraltar Industries, Inc. Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in Gibraltar 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.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Gibraltar Industries (free visualization of insider trades).

Important note: Gibraltar Industries 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.