How Does Daktronics' (NASDAQ:DAKT) CEO Pay Compare With Company Performance?

Reece Kurtenbach became the CEO of Daktronics, Inc. (NASDAQ:DAKT) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Daktronics

Comparing Daktronics, Inc.'s CEO Compensation With the industry

According to our data, Daktronics, Inc. has a market capitalization of US$191m, and paid its CEO total annual compensation worth US$519k over the year to May 2020. That is, the compensation was roughly the same as last year. In particular, the salary of US$451.5k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.1m. Accordingly, Daktronics pays its CEO under the industry median. Moreover, Reece Kurtenbach also holds US$2.2m worth of Daktronics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 33% of total compensation represents salary and 67% is other remuneration. Daktronics pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Daktronics, Inc.'s Growth

Daktronics, Inc. has reduced its earnings per share by 59% a year over the last three years. In the last year, its revenue is down 3.9%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Daktronics, Inc. Been A Good Investment?

Given the total shareholder loss of 50% over three years, many shareholders in Daktronics, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Reece is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Daktronics that investors should look into moving forward.

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. 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.
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