Why We Think APi Group Corporation's (NYSE:APG) CEO Compensation Is Not Excessive At All
Key Insights
- APi Group will host its Annual General Meeting on 16th of May
- Salary of US$1.43m is part of CEO Russ Becker's total remuneration
- Total compensation is similar to the industry average
- Over the past three years, APi Group's EPS fell by 26% and over the past three years, the total shareholder return was 159%
Despite strong share price growth of 159% for APi Group Corporation (NYSE:APG) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 16th of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for APi Group
How Does Total Compensation For Russ Becker Compare With Other Companies In The Industry?
At the time of writing, our data shows that APi Group Corporation has a market capitalization of US$12b, and reported total annual CEO compensation of US$8.8m for the year to December 2024. That's a notable decrease of 13% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
On comparing similar companies in the American Construction industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. This suggests that APi Group remunerates its CEO largely in line with the industry average. What's more, Russ Becker holds US$149m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.4m | US$1.4m | 16% |
| Other | US$7.4m | US$8.8m | 84% |
| Total Compensation | US$8.8m | US$10m | 100% |
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. In APi Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
APi Group Corporation's Growth
Over the last three years, APi Group Corporation has shrunk its earnings per share by 26% per year. Its revenue is up 3.2% over the last year.
The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has APi Group Corporation Been A Good Investment?
We think that the total shareholder return of 159%, over three years, would leave most APi Group Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for APi Group that investors should think about before committing capital to this stock.
Important note: APi Group 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.
Valuation is complex, but we're here to simplify it.
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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.