We Think BrightView Holdings, Inc.'s (NYSE:BV) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• BrightView Holdings to hold its Annual General Meeting on 7th of March
• Total pay for CEO Andrew Masterman includes US$900.0k salary
• The total compensation is 111% higher than the average for the industry
• BrightView Holdings' EPS declined by 40% over the past three years while total shareholder loss over the past three years was 57%

The results at BrightView Holdings, Inc. (NYSE:BV) have been quite disappointing recently and CEO Andrew Masterman bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of March. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for BrightView Holdings

How Does Total Compensation For Andrew Masterman Compare With Other Companies In The Industry?

According to our data, BrightView Holdings, Inc. has a market capitalization of US$591m, and paid its CEO total annual compensation worth US$10m over the year to September 2022. We note that's an increase of 83% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$900k.

On comparing similar companies from the American Commercial Services industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$4.9m. Accordingly, our analysis reveals that BrightView Holdings, Inc. pays Andrew Masterman north of the industry median. Moreover, Andrew Masterman also holds US$4.6m worth of BrightView Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	US$900k	US$850k	9%
Other	US$9.5m	US$4.9m	91%
Total Compensation	US$10m	US$5.7m	100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. In BrightView Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

BrightView Holdings, Inc.'s Growth

BrightView Holdings, Inc. has reduced its earnings per share by 40% a year over the last three years. It achieved revenue growth of 9.6% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 BrightView Holdings, Inc. Been A Good Investment?

The return of -57% over three years would not have pleased BrightView Holdings, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 identified 3 warning signs for BrightView Holdings (1 is a bit concerning!) that you should be aware of before investing here.

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.

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

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.