How Much Is Twin Disc, Incorporated (NASDAQ:TWIN) CEO Getting Paid?

John Batten became the CEO of Twin Disc, Incorporated (NASDAQ:TWIN) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Twin Disc pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Twin Disc

How Does Total Compensation For John Batten Compare With Other Companies In The Industry?

At the time of writing, our data shows that Twin Disc, Incorporated has a market capitalization of US$115m, and reported total annual CEO compensation of US$1.8m for the year to June 2020. Notably, that's a decrease of 10% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$590k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$674k. Hence, we can conclude that John Batten is remunerated higher than the industry median. Furthermore, John Batten directly owns US$24m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. It's interesting to note that Twin Disc pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Twin Disc, Incorporated's Growth

Over the last three years, Twin Disc, Incorporated has shrunk its earnings per share by 95% per year. In the last year, its revenue is down 19%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Twin Disc, Incorporated Been A Good Investment?

With a three year total loss of 70% for the shareholders, Twin Disc, Incorporated would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Twin Disc pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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 2 warning signs for Twin Disc 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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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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