Matt Missad became the CEO of Universal Forest Products, Inc. (NASDAQ:UFPI) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Universal Forest Products
How Does Matt Missad's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Universal Forest Products, Inc. has a market cap of US$2.5b, and reported total annual CEO compensation of US$4.9m for the year to December 2019. Notably, that's an increase of 31% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$793k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.6m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 19% of total compensation out of all the companies we analysed, while other remuneration made up 81% of the pie. So it seems like there isn't a significant difference between Universal Forest Products and the broader market, in terms of salary allocation in the overall compensation package.
So Matt Missad is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at Universal Forest Products has changed from year to year.
Is Universal Forest Products, Inc. Growing?
On average over the last three years, Universal Forest Products, Inc. has seen earnings per share (EPS) move in a favourable direction by 20% each year (using a line of best fit). In the last year, its revenue is down 1.6%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Universal Forest Products, Inc. Been A Good Investment?
Universal Forest Products, Inc. has served shareholders reasonably well, with a total return of 31% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Matt Missad is paid around what is normal for the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Universal Forest Products that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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