We Think Shareholders May Want To Consider A Review Of Quanex Building Products Corporation's (NYSE:NX) CEO Compensation Package

Key Insights

• Quanex Building Products will host its Annual General Meeting on 27th of February
• Salary of US$875.0k is part of CEO George Wilson's total remuneration
• The total compensation is similar to the average for the industry
• Quanex Building Products' EPS declined by 26% over the past three years while total shareholder loss over the past three years was 7.7%

The results at Quanex Building Products Corporation (NYSE:NX) have been quite disappointing recently and CEO George Wilson bears some responsibility for this. At the upcoming AGM on 27th of February, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Quanex Building Products

How Does Total Compensation For George Wilson Compare With Other Companies In The Industry?

Our data indicates that Quanex Building Products Corporation has a market capitalization of US$962m, and total annual CEO compensation was reported as US$4.8m for the year to October 2024. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$875k.

In comparison with other companies in the American Building industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$5.1m. From this we gather that George Wilson is paid around the median for CEOs in the industry. What's more, George Wilson holds US$5.9m 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$875k	US$800k	18%
Other	US$3.9m	US$4.0m	82%
Total Compensation	US$4.8m	US$4.8m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Quanex Building Products is paying a higher share of its remuneration through a 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.

A Look at Quanex Building Products Corporation's Growth Numbers

Quanex Building Products Corporation has reduced its earnings per share by 26% a year over the last three years. It achieved revenue growth of 13% over the last year.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Quanex Building Products Corporation Been A Good Investment?

With a three year total loss of 7.7% for the shareholders, Quanex Building Products Corporation would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Quanex Building Products (2 can't be ignored!) that you should be aware of before investing here.

Important note: Quanex Building Products 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.