We Think Tredegar Corporation's (NYSE:TG) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Tredegar to hold its Annual General Meeting on 9th of May
• CEO John Steitz's total compensation includes salary of US$928.5k
• The total compensation is 91% higher than the average for the industry
• Over the past three years, Tredegar's EPS fell by 65% and over the past three years, the total loss to shareholders 54%

Shareholders will probably not be too impressed with the underwhelming results at Tredegar Corporation (NYSE:TG) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 9th 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.

View our latest analysis for Tredegar

How Does Total Compensation For John Steitz Compare With Other Companies In The Industry?

According to our data, Tredegar Corporation has a market capitalization of US$213m, and paid its CEO total annual compensation worth US$1.9m over the year to December 2023. We note that's a decrease of 43% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$929k.

On comparing similar companies from the American Metals and Mining industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$994k. Accordingly, our analysis reveals that Tredegar Corporation pays John Steitz north of the industry median. Furthermore, John Steitz directly owns US$1.5m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$929k	US$895k	49%
Other	US$974k	US$2.5m	51%
Total Compensation	US$1.9m	US$3.4m	100%

On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. It's interesting to note that Tredegar pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Tredegar Corporation's Growth Numbers

Over the last three years, Tredegar Corporation has shrunk its earnings per share by 65% per year. In the last year, its revenue is down 25%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tredegar Corporation Been A Good Investment?

The return of -54% over three years would not have pleased Tredegar Corporation shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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.

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 2 warning signs for Tredegar that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.