It Looks Like Leggett & Platt, Incorporated's (NYSE:LEG) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Leggett & Platt to hold its Annual General Meeting on 8th of May
• Salary of US$1.12m is part of CEO Mitch Dolloff's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Leggett & Platt's EPS fell by 51% and over the past three years, the total loss to shareholders 72%

The results at Leggett & Platt, Incorporated (NYSE:LEG) have been quite disappointing recently and CEO Mitch Dolloff bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 8th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Leggett & Platt

Comparing Leggett & Platt, Incorporated's CEO Compensation With The Industry

At the time of writing, our data shows that Leggett & Platt, Incorporated has a market capitalization of US$2.4b, and reported total annual CEO compensation of US$7.3m for the year to December 2023. That's a slight decrease of 3.9% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

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$9.2m. This suggests that Leggett & Platt remunerates its CEO largely in line with the industry average. What's more, Mitch Dolloff holds US$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	15%
Other	US$6.2m	US$6.5m	85%
Total Compensation	US$7.3m	US$7.6m	100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. It's interesting to note that Leggett & Platt 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.

A Look at Leggett & Platt, Incorporated's Growth Numbers

Over the last three years, Leggett & Platt, Incorporated has shrunk its earnings per share by 51% per year. Its revenue is down 8.5% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Leggett & Platt, Incorporated Been A Good Investment?

The return of -72% over three years would not have pleased Leggett & Platt, Incorporated shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Leggett & Platt (1 is concerning!) that you should be aware of before investing here.

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. 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.