Here's Why TopBuild Corp.'s (NYSE:BLD) CEO May Deserve A Raise

Key Insights

• TopBuild to hold its Annual General Meeting on 29th of April
• Total pay for CEO Robert Buck includes US$970.8k salary
• The overall pay is 36% below the industry average
• TopBuild's EPS grew by 37% over the past three years while total shareholder return over the past three years was 71%

The impressive results at TopBuild Corp. (NYSE:BLD) recently will be great news for shareholders. At the upcoming AGM on 29th of April, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for TopBuild

Comparing TopBuild Corp.'s CEO Compensation With The Industry

According to our data, TopBuild Corp. has a market capitalization of US$12b, and paid its CEO total annual compensation worth US$7.8m over the year to December 2023. Notably, that's an increase of 24% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$971k.

On comparing similar companies in the American Consumer Durables industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. In other words, TopBuild pays its CEO lower than the industry median. Furthermore, Robert Buck directly owns US$18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$971k	US$883k	12%
Other	US$6.8m	US$5.4m	88%
Total Compensation	US$7.8m	US$6.3m	100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that TopBuild allocates a smaller portion of compensation to salary 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.

TopBuild Corp.'s Growth

Over the past three years, TopBuild Corp. has seen its earnings per share (EPS) grow by 37% per year. It achieved revenue growth of 3.7% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has TopBuild Corp. Been A Good Investment?

We think that the total shareholder return of 71%, over three years, would leave most TopBuild Corp. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for TopBuild that investors should think about before committing capital to this stock.

Switching gears from TopBuild, 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. 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.