Latham Group, Inc.'s (NASDAQ:SWIM) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Latham Group's Annual General Meeting to take place on 2nd of May
• CEO Scott Rajeski's total compensation includes salary of US$456.0k
• Total compensation is similar to the industry average
• Over the past three years, Latham Group's EPS fell by 4.9% and over the past three years, the total loss to shareholders 89%

Shareholders will probably not be too impressed with the underwhelming results at Latham Group, Inc. (NASDAQ:SWIM) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 2nd of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Latham Group

Comparing Latham Group, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Latham Group, Inc. has a market capitalization of US$351m, and reported total annual CEO compensation of US$1.6m for the year to December 2023. That's a slight decrease of 3.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$456k.

On examining similar-sized companies in the American Leisure industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.9m. From this we gather that Scott Rajeski is paid around the median for CEOs in the industry. Moreover, Scott Rajeski also holds US$13m worth of Latham Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$456k	US$448k	28%
Other	US$1.1m	US$1.2m	72%
Total Compensation	US$1.6m	US$1.7m	100%

On an industry level, roughly 26% of total compensation represents salary and 74% is other remuneration. Latham Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Latham Group, Inc.'s Growth

Over the last three years, Latham Group, Inc. has shrunk its earnings per share by 4.9% per year. In the last year, its revenue is down 19%.

Overall this is not a very positive result for shareholders. 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 Latham Group, Inc. Been A Good Investment?

Few Latham Group, Inc. shareholders would feel satisfied with the return of -89% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, 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. That's why we did our research, and identified 4 warning signs for Latham Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.