Shareholders Will Probably Not Have Any Issues With Arcosa, Inc.'s (NYSE:ACA) CEO Compensation

Key Insights

• Arcosa's Annual General Meeting to take place on 8th of May
• Salary of US$980.5k is part of CEO Antonio Carrillo's total remuneration
• The overall pay is comparable to the industry average
• Arcosa's EPS grew by 14% over the past three years while total shareholder return over the past three years was 20%

Performance at Arcosa, Inc. (NYSE:ACA) has been reasonably good and CEO Antonio Carrillo has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 8th of May. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Arcosa

Comparing Arcosa, Inc.'s CEO Compensation With The Industry

Our data indicates that Arcosa, Inc. has a market capitalization of US$3.7b, and total annual CEO compensation was reported as US$6.5m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$981k.

On examining similar-sized companies in the American Construction industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.3m. So it looks like Arcosa compensates Antonio Carrillo in line with the median for the industry. Furthermore, Antonio Carrillo directly owns US$28m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$981k	US$925k	15%
Other	US$5.5m	US$5.4m	85%
Total Compensation	US$6.5m	US$6.3m	100%

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. Arcosa sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Arcosa, Inc.'s Growth

Arcosa, Inc.'s earnings per share (EPS) grew 14% per year over the last three years. Its revenue is up 2.9% over the last year.

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. 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 Arcosa, Inc. Been A Good Investment?

Arcosa, Inc. has served shareholders reasonably well, with a total return of 20% 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Arcosa that investors should think about before committing capital to this stock.

Important note: Arcosa 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.