Why We Think Shareholders May Be Considering Bumping Up Installed Building Products, Inc.'s (NYSE:IBP) CEO Compensation

Key Insights

• Installed Building Products to hold its Annual General Meeting on 20th of May
• Salary of US$883.8k is part of CEO Jeff Edwards's total remuneration
• Total compensation is 48% below industry average
• Installed Building Products' EPS grew by 25% over the past three years while total shareholder return over the past three years was 97%

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The solid performance at Installed Building Products, Inc. (NYSE:IBP) has been impressive and shareholders will probably be pleased to know that CEO Jeff Edwards has delivered. At the upcoming AGM on 20th of May, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Installed Building Products

How Does Total Compensation For Jeff Edwards Compare With Other Companies In The Industry?

Our data indicates that Installed Building Products, Inc. has a market capitalization of US$4.6b, and total annual CEO compensation was reported as US$6.2m for the year to December 2024. That's a fairly small increase of 4.1% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$884k.

For comparison, other companies in the American Consumer Durables industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$12m. Accordingly, Installed Building Products pays its CEO under the industry median. What's more, Jeff Edwards holds US$729m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Installed Building Products allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Installed Building Products, Inc.'s Growth

Installed Building Products, Inc.'s earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 4.3%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Installed Building Products, Inc. Been A Good Investment?

We think that the total shareholder return of 97%, over three years, would leave most Installed Building Products, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Installed Building Products that you should be aware of before investing.

Important note: Installed Building Products 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. 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.