Trex Company, Inc.'s (NYSE:TREX) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
- Trex Company to hold its Annual General Meeting on 6th of May
- Total pay for CEO Bryan Fairbanks includes US$880.0k salary
- Total compensation is similar to the industry average
- Trex Company's EPS grew by 5.3% over the past three years while total shareholder loss over the past three years was 1.6%
As many shareholders of Trex Company, Inc. (NYSE:TREX) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 6th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Trex Company
How Does Total Compensation For Bryan Fairbanks Compare With Other Companies In The Industry?
Our data indicates that Trex Company, Inc. has a market capitalization of US$6.2b, and total annual CEO compensation was reported as US$5.9m for the year to December 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$880k.
On comparing similar companies from the American Building industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$7.0m. From this we gather that Bryan Fairbanks is paid around the median for CEOs in the industry. Moreover, Bryan Fairbanks also holds US$5.1m worth of Trex Company 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$880k | US$747k | 15% |
| Other | US$5.0m | US$5.0m | 85% |
| Total Compensation | US$5.9m | US$5.8m | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. There isn't a significant difference between Trex Company and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Trex Company, Inc.'s Growth
Over the past three years, Trex Company, Inc. has seen its earnings per share (EPS) grow by 5.3% per year. Its revenue is up 5.2% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Trex Company, Inc. Been A Good Investment?
With a three year total loss of 1.6% for the shareholders, Trex Company, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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 Trex Company that investors should think about before committing capital to this stock.
Important note: Trex Company 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.
Discover if Trex Company might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.