Shareholders Will Probably Hold Off On Increasing Polaris Inc.'s (NYSE:PII) CEO Compensation For The Time Being

Key Insights

• Polaris to hold its Annual General Meeting on 25th of April
• CEO Mike Speetzen's total compensation includes salary of US$1.12m
• The total compensation is similar to the average for the industry
• Polaris' EPS grew by 15% over the past three years while total shareholder loss over the past three years was 36%

In the past three years, the share price of Polaris Inc. (NYSE:PII) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Polaris

How Does Total Compensation For Mike Speetzen Compare With Other Companies In The Industry?

According to our data, Polaris Inc. has a market capitalization of US$4.9b, and paid its CEO total annual compensation worth US$8.9m over the year to December 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

In comparison with other companies in the American Leisure industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$11m. So it looks like Polaris compensates Mike Speetzen in line with the median for the industry. Furthermore, Mike Speetzen directly owns US$2.6m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	13%
Other	US$7.7m	US$7.7m	87%
Total Compensation	US$8.9m	US$8.8m	100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. It's interesting to note that Polaris allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Polaris Inc.'s Growth Numbers

Polaris Inc.'s earnings per share (EPS) grew 15% per year over the last three years. It achieved revenue growth of 4.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Polaris Inc. Been A Good Investment?

With a total shareholder return of -36% over three years, Polaris Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 Polaris that you should be aware of before investing.

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.