Reece Kurtenbach became the CEO of Daktronics, Inc. (NASDAQ:DAKT) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Reece Kurtenbach’s Compensation Compare With Similar Sized Companies?
According to our data, Daktronics, Inc. has a market capitalization of US$339m, and pays its CEO total annual compensation worth US$527k. (This is based on the year to April 2018). While we always look at total compensation first, we note that the salary component is less, at US$428k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.6m.
Most shareholders would consider it a positive that Reece Kurtenbach takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Daktronics has changed from year to year.
Is Daktronics, Inc. Growing?
Over the last three years Daktronics, Inc. has shrunk its earnings per share by an average of 7.7% per year (measured with a line of best fit). In the last year, its revenue is down -5.8%.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Daktronics, Inc. Been A Good Investment?
Daktronics, Inc. has not done too badly by shareholders, with a total return of 5.8%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Daktronics, Inc. is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Reece Kurtenbach is under the median of a group of similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. So while shareholders shouldn’t be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Daktronics.
If you want to buy a stock that is better than Daktronics, this free list of high return, low debt companies is a great place to look.
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