Steve Kaniewski became the CEO of Valmont Industries, Inc. (NYSE:VMI) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Steve Kaniewski Compare With Other Companies In The Industry?
At the time of writing, our data shows that Valmont Industries, Inc. has a market capitalization of US$3.3b, and reported total annual CEO compensation of US$4.9m for the year to December 2019. We note that's an increase of 10% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.
On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.3m. So it looks like Valmont Industries compensates Steve Kaniewski in line with the median for the industry. Furthermore, Steve Kaniewski directly owns US$1.4m worth of shares in the company.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Valmont Industries is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Valmont Industries, Inc.'s Growth Numbers
Valmont Industries, Inc. has reduced its earnings per share by 7.1% a year over the last three years. Revenue was pretty flat on last year.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Valmont Industries, Inc. Been A Good Investment?
With a three year total loss of 0.9% for the shareholders, Valmont Industries, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Steve is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Valmont Industries that investors should think about before committing capital to this stock.
Important note: Valmont Industries 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.
When trading Valmont Industries or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.