Shareholders will be pleased by the robust performance of Taylor Devices, Inc. (NASDAQ:TAYD) recently and this will be kept in mind in the upcoming AGM on 22 October 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Comparing Taylor Devices, Inc.'s CEO Compensation With the industry
According to our data, Taylor Devices, Inc. has a market capitalization of US$40m, and paid its CEO total annual compensation worth US$291k over the year to May 2021. That's a notable decrease of 25% on last year. In particular, the salary of US$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$527k. Accordingly, Taylor Devices pays its CEO under the industry median.
On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. According to our research, Taylor Devices has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Taylor Devices, Inc.'s Growth
Over the past three years, Taylor Devices, Inc. has seen its earnings per share (EPS) grow by 6.3% per year. Its revenue is down 15% over the previous year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Taylor Devices, Inc. Been A Good Investment?
Taylor Devices, Inc. has generated a total shareholder return of 0.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Taylor Devices you should be aware of, and 1 of them shouldn't be ignored.
Switching gears from Taylor Devices, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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