Most Shareholders Will Probably Agree With Somnigroup International Inc.'s (NYSE:SGI) CEO Compensation

Key Insights

• Somnigroup International to hold its Annual General Meeting on 14th of May
• Total pay for CEO Scott Thompson includes US$1.17m salary
• The total compensation is similar to the average for the industry
• Somnigroup International's EPS declined by 17% over the past three years while total shareholder return over the past three years was 145%

We've discovered 2 warning signs about Somnigroup International. View them for free.

The share price of Somnigroup International Inc. (NYSE:SGI) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 14th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Somnigroup International

How Does Total Compensation For Scott Thompson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Somnigroup International Inc. has a market capitalization of US$13b, and reported total annual CEO compensation of US$11m for the year to December 2024. That's slightly lower by 7.6% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

For comparison, other companies in the American Consumer Durables industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$14m. So it looks like Somnigroup International compensates Scott Thompson in line with the median for the industry. Moreover, Scott Thompson also holds US$167m worth of Somnigroup International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.1m	11%
Other	US$9.8m	US$11m	89%
Total Compensation	US$11m	US$12m	100%

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Somnigroup International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Somnigroup International Inc.'s Growth

Over the last three years, Somnigroup International Inc. has shrunk its earnings per share by 17% per year. In the last year, its revenue changed by just 0.1%.

The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Somnigroup International Inc. Been A Good Investment?

Boasting a total shareholder return of 145% over three years, Somnigroup International Inc. has done well by shareholders. 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.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 2 warning signs for Somnigroup International (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Somnigroup International, 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.