Here's Why Park Aerospace Corp.'s (NYSE:PKE) CEO May Not Expect A Pay Rise This Year

Performance at Park Aerospace Corp. (NYSE:PKE) has not been particularly rosy recently and shareholders will likely be holding CEO Brian Shore and the board accountable for this. At the upcoming AGM on 20 July 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Park Aerospace

Comparing Park Aerospace Corp.'s CEO Compensation With the industry

According to our data, Park Aerospace Corp. has a market capitalization of US$319m, and paid its CEO total annual compensation worth US$316k over the year to February 2021. That is, the compensation was roughly the same as last year. Notably, the salary which is US$220.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.1m. In other words, Park Aerospace pays its CEO lower than the industry median. Moreover, Brian Shore also holds US$23m worth of Park Aerospace stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	US$220k	US$250k	70%
Other	US$96k	US$73k	30%
Total Compensation	US$316k	US$323k	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Park Aerospace pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Park Aerospace Corp.'s Growth Numbers

Over the last three years, Park Aerospace Corp. has shrunk its earnings per share by 32% per year. It saw its revenue drop 17% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Park Aerospace Corp. Been A Good Investment?

Given the total shareholder loss of 6.7% over three years, many shareholders in Park Aerospace Corp. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Park Aerospace (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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. 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.
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