Here's Why It's Unlikely That Team, Inc.'s (NYSE:TISI) CEO Will See A Pay Rise This Year

The results at Team, Inc. (NYSE:TISI) have been quite disappointing recently and CEO Amerino Gatti bears some responsibility for this. At the upcoming AGM on 13 May 2021, 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Team

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

Our data indicates that Team, Inc. has a market capitalization of US$265m, and total annual CEO compensation was reported as US$2.2m for the year to December 2020. That's a notable decrease of 40% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$722k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$2.0m. So it looks like Team compensates Amerino Gatti in line with the median for the industry. Moreover, Amerino Gatti also holds US$942k worth of Team stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$722k	US$850k	33%
Other	US$1.5m	US$2.9m	67%
Total Compensation	US$2.2m	US$3.7m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. Team pays out 33% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Team, Inc.'s Growth Numbers

Team, Inc. has reduced its earnings per share by 39% a year over the last three years. In the last year, its revenue is down 28%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. 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 Team, Inc. Been A Good Investment?

Few Team, Inc. shareholders would feel satisfied with the return of -57% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Team that investors should think about before committing capital to this stock.

Switching gears from Team, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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