Here's What We Learned About The CEO Pay At Ennis, Inc. (NYSE:EBF)

Keith Walters became the CEO of Ennis, Inc. (NYSE:EBF) in 1997, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Ennis.

View our latest analysis for Ennis

Comparing Ennis, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Ennis, Inc. has a market capitalization of US$474m, and reported total annual CEO compensation of US$3.1m for the year to February 2020. Notably, that's a decrease of 18% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$972k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$3.5m. So it looks like Ennis compensates Keith Walters in line with the median for the industry. Furthermore, Keith Walters directly owns US$6.5m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 23% of total compensation represents salary and 77% is other remuneration. Ennis is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Ennis, Inc.'s Growth Numbers

Ennis, Inc. has reduced its earnings per share by 5.4% a year over the last three years. Its revenue is down 13% over the previous 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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Ennis, Inc. Been A Good Investment?

Ennis, Inc. has not done too badly by shareholders, with a total return of 5.7%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Ennis, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Ennis has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

Whatever your view on compensation, you might want to check if insiders are buying or selling Ennis shares (free trial).

Important note: Ennis 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. 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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