Here's Why Universal Technical Institute, Inc.'s (NYSE:UTI) CEO Is Unlikely to Expect A Pay Rise This Year

Key Insights

• Universal Technical Institute will host its Annual General Meeting on 2nd of March
• CEO Jerome Grant's total compensation includes salary of US$519.2k
• The overall pay is comparable to the industry average
• Universal Technical Institute's EPS grew by 46% over the past three years while total shareholder return over the past three years was 3.5%

Under the guidance of CEO Jerome Grant, Universal Technical Institute, Inc. (NYSE:UTI) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 2nd of March. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Universal Technical Institute

Comparing Universal Technical Institute, Inc.'s CEO Compensation With The Industry

Our data indicates that Universal Technical Institute, Inc. has a market capitalization of US$260m, and total annual CEO compensation was reported as US$1.9m for the year to September 2022. Notably, that's a decrease of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$519k.

On comparing similar companies from the American Consumer Services industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.9m. This suggests that Universal Technical Institute remunerates its CEO largely in line with the industry average. What's more, Jerome Grant holds US$834k worth of shares in the company in their own name.

Component	2022	2021	Proportion (2022)
Salary	US$519k	US$500k	28%
Other	US$1.4m	US$1.7m	72%
Total Compensation	US$1.9m	US$2.2m	100%

Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. It's interesting to note that Universal Technical Institute pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Universal Technical Institute, Inc.'s Growth

Universal Technical Institute, Inc.'s earnings per share (EPS) grew 46% per year over the last three years. In the last year, its revenue is up 19%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Universal Technical Institute, Inc. Been A Good Investment?

Universal Technical Institute, Inc. has not done too badly by shareholders, with a total return of 3.5%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Universal Technical Institute 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.