Here's Why Shareholders Should Examine BGSF, Inc.'s (NYSE:BGSF) CEO Compensation Package More Closely

Key Insights

• BGSF's Annual General Meeting to take place on 7th of August
• Salary of US$450.5k is part of CEO Beth Garvey's total remuneration
• The total compensation is 46% higher than the average for the industry
• BGSF's EPS declined by 42% over the past three years while total shareholder loss over the past three years was 24%

BGSF, Inc. (NYSE:BGSF) has not performed well recently and CEO Beth Garvey will probably need to up their game. At the upcoming AGM on 7th of August, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for BGSF

How Does Total Compensation For Beth Garvey Compare With Other Companies In The Industry?

At the time of writing, our data shows that BGSF, Inc. has a market capitalization of US$94m, and reported total annual CEO compensation of US$693k for the year to December 2023. Notably, that's a decrease of 32% over the year before. Notably, the salary which is US$450.5k, represents most of the total compensation being paid.

On comparing similar-sized companies in the American Professional Services industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$475k. Accordingly, our analysis reveals that BGSF, Inc. pays Beth Garvey north of the industry median. Furthermore, Beth Garvey directly owns US$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2023	Proportion (2023)
Salary	US$451k	US$425k	65%
Other	US$242k	US$596k	35%
Total Compensation	US$693k	US$1.0m	100%

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. It's interesting to note that BGSF pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

BGSF, Inc.'s Growth

Over the last three years, BGSF, Inc. has shrunk its earnings per share by 42% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has BGSF, Inc. Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in BGSF, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in BGSF we think you should know about.

Important note: BGSF 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com