The Compensation For The AZEK Company Inc.'s (NYSE:AZEK) CEO Looks Deserved And Here's Why

Key Insights

• AZEK to hold its Annual General Meeting on 28th of February
• Total pay for CEO Jesse Singh includes US$850.6k salary
• Total compensation is similar to the industry average
• AZEK's EPS grew by 16% over the past three years while total shareholder return over the past three years was 55%

The performance at The AZEK Company Inc. (NYSE:AZEK) has been quite strong recently and CEO Jesse Singh has played a role in it. Coming up to the next AGM on 28th of February, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for AZEK

Comparing The AZEK Company Inc.'s CEO Compensation With The Industry

According to our data, The AZEK Company Inc. has a market capitalization of US$6.6b, and paid its CEO total annual compensation worth US$6.3m over the year to September 2024. That's a notable increase of 20% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$851k.

On examining similar-sized companies in the American Building industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.3m. So it looks like AZEK compensates Jesse Singh in line with the median for the industry. Moreover, Jesse Singh also holds US$72m worth of AZEK stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$851k	US$825k	13%
Other	US$5.5m	US$4.5m	87%
Total Compensation	US$6.3m	US$5.3m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. AZEK is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

The AZEK Company Inc.'s Growth

The AZEK Company Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is up 6.6%.

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. 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 The AZEK Company Inc. Been A Good Investment?

We think that the total shareholder return of 55%, over three years, would leave most The AZEK Company Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for AZEK that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.