Here's Why We Think Liquidity Services, Inc.'s (NASDAQ:LQDT) CEO Compensation Looks Fair for the time being

Key Insights

• Liquidity Services to hold its Annual General Meeting on 29th of February
• Total pay for CEO Bill Angrick includes US$435.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Liquidity Services' EPS grew by 52% and over the past three years, the total shareholder return was 8.2%

Under the guidance of CEO Bill Angrick, Liquidity Services, Inc. (NASDAQ:LQDT) has performed reasonably well recently. As shareholders go into the upcoming AGM on 29th of February, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Liquidity Services

How Does Total Compensation For Bill Angrick Compare With Other Companies In The Industry?

At the time of writing, our data shows that Liquidity Services, Inc. has a market capitalization of US$527m, and reported total annual CEO compensation of US$3.8m for the year to September 2023. That's a notable decrease of 13% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$435k.

In comparison with other companies in the American Commercial Services industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$3.8m. This suggests that Liquidity Services remunerates its CEO largely in line with the industry average. Moreover, Bill Angrick also holds US$115m worth of Liquidity Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$435k	US$420k	12%
Other	US$3.3m	US$3.9m	88%
Total Compensation	US$3.8m	US$4.3m	100%

On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. Liquidity Services sets aside a smaller share of compensation for 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 Liquidity Services, Inc.'s Growth Numbers

Liquidity Services, Inc.'s earnings per share (EPS) grew 52% per year over the last three years. Its revenue is up 9.8% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Liquidity Services, Inc. Been A Good Investment?

With a total shareholder return of 8.2% over three years, Liquidity Services, Inc. has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Liquidity Services that investors should look into moving forward.

Important note: Liquidity Services 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.