Increases to CEO Compensation Might Be Put On Hold For Now at The Dixie Group, Inc. (NASDAQ:DXYN)

Performance at The Dixie Group, Inc. (NASDAQ:DXYN) has been reasonably good and CEO Dan Frierson has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 05 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Dixie Group

How Does Total Compensation For Dan Frierson Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Dixie Group, Inc. has a market capitalization of US$51m, and reported total annual CEO compensation of US$650k for the year to December 2020. That's just a smallish increase of 3.1% on last year. We note that the salary portion, which stands at US$574.2k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$378k. Accordingly, our analysis reveals that The Dixie Group, Inc. pays Dan Frierson north of the industry median. Moreover, Dan Frierson also holds US$4.3m worth of Dixie Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$574k	US$625k	88%
Other	US$76k	US$5.6k	12%
Total Compensation	US$650k	US$631k	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Dixie Group pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at The Dixie Group, Inc.'s Growth Numbers

The Dixie Group, Inc.'s earnings per share (EPS) grew 57% per year over the last three years. Its revenue is down 16% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The Dixie Group, Inc. Been A Good Investment?

With a total shareholder return of 9.8% over three years, The Dixie Group, Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Dixie Group that investors should be aware of in a dynamic business environment.

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.

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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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