Bill Griffiths has been the CEO of Quanex Building Products Corporation (NYSE:NX) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Bill Griffiths’s Compensation Compare With Similar Sized Companies?
According to our data, Quanex Building Products Corporation has a market capitalization of US$537m, and pays its CEO total annual compensation worth US$4.0m. (This figure is for the year to October 2018). While we always look at total compensation first, we note that the salary component is less, at US$815k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.8m.
Thus we can conclude that Bill Griffiths receives more in total compensation than the median of a group of companies in the same market, and of similar size to Quanex Building Products Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Quanex Building Products has changed over time.
Is Quanex Building Products Corporation Growing?
On average over the last three years, Quanex Building Products Corporation has grown earnings per share (EPS) by 55% each year (using a line of best fit). It achieved revenue growth of 3.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Quanex Building Products Corporation Been A Good Investment?
Given the total loss of 14% over three years, many shareholders in Quanex Building Products Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Quanex Building Products Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Quanex Building Products insiders are buying or selling shares.
If you want to buy a stock that is better than Quanex Building Products, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.