This Is The Reason Why We Think Virco Mfg. Corporation's (NASDAQ:VIRC) CEO Might Be Underpaid

Key Insights

• Virco Mfg will host its Annual General Meeting on 18th of June
• Total pay for CEO Robert Virtue includes US$364.3k salary
• The total compensation is 60% less than the average for the industry
• Virco Mfg's EPS grew by 94% over the past three years while total shareholder return over the past three years was 345%

Shareholders will be pleased by the impressive results for Virco Mfg. Corporation (NASDAQ:VIRC) recently and CEO Robert Virtue has played a key role. At the upcoming AGM on 18th of June, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Virco Mfg

Comparing Virco Mfg. Corporation's CEO Compensation With The Industry

According to our data, Virco Mfg. Corporation has a market capitalization of US$254m, and paid its CEO total annual compensation worth US$557k over the year to January 2024. That's just a smallish increase of 6.6% on last year. In particular, the salary of US$364.3k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the American Commercial Services industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.4m. This suggests that Robert Virtue is paid below the industry median. Furthermore, Robert Virtue directly owns US$51m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$364k	US$352k	65%
Other	US$193k	US$170k	35%
Total Compensation	US$557k	US$522k	100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Virco Mfg is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Virco Mfg. Corporation's Growth

Over the past three years, Virco Mfg. Corporation has seen its earnings per share (EPS) grow by 94% per year. In the last year, its revenue is up 20%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Virco Mfg. Corporation Been A Good Investment?

We think that the total shareholder return of 345%, over three years, would leave most Virco Mfg. Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Virco Mfg that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.