We Think Some Shareholders May Hesitate To Increase Willdan Group, Inc.'s (NASDAQ:WLDN) CEO Compensation

The share price of Willdan Group, Inc. (NASDAQ:WLDN) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 10 June 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Willdan Group

How Does Total Compensation For Tom Brisbin Compare With Other Companies In The Industry?

According to our data, Willdan Group, Inc. has a market capitalization of US$473m, and paid its CEO total annual compensation worth US$2.2m over the year to January 2021. That's a notable decrease of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$419k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$1.6m. This suggests that Tom Brisbin is paid more than the median for the industry. What's more, Tom Brisbin holds US$13m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2019	Proportion (2021)
Salary	US$419k	US$448k	19%
Other	US$1.8m	US$2.1m	81%
Total Compensation	US$2.2m	US$2.6m	100%

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. In Willdan Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Willdan Group, Inc.'s Growth

Over the last three years, Willdan Group, Inc. has shrunk its earnings per share by 109% per year. It saw its revenue drop 20% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Willdan Group, Inc. Been A Good Investment?

Willdan Group, Inc. has served shareholders reasonably well, with a total return of 30% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 4 warning signs for Willdan Group that investors should look into moving forward.

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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