ScanSource, Inc.'s (NASDAQ:SCSC) CEO Compensation Looks Acceptable To Us And Here's Why

Key Insights

• ScanSource's Annual General Meeting to take place on 10th of December
• Salary of US$901.0k is part of CEO Mike Baur's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, ScanSource's EPS grew by 7.2% and over the past three years, the total shareholder return was 52%

CEO Mike Baur has done a decent job of delivering relatively good performance at ScanSource, Inc. (NASDAQ:SCSC) recently. As shareholders go into the upcoming AGM on 10th of December, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for ScanSource

How Does Total Compensation For Mike Baur Compare With Other Companies In The Industry?

According to our data, ScanSource, Inc. has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$5.9m over the year to June 2024. That's just a smallish increase of 3.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$901k.

For comparison, other companies in the American Electronic industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$5.8m. This suggests that ScanSource remunerates its CEO largely in line with the industry average. What's more, Mike Baur holds US$9.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$901k	US$875k	15%
Other	US$5.0m	US$4.8m	85%
Total Compensation	US$5.9m	US$5.7m	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. ScanSource pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at ScanSource, Inc.'s Growth Numbers

Over the past three years, ScanSource, Inc. has seen its earnings per share (EPS) grow by 7.2% per year. Its revenue is down 15% over the previous year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ScanSource, Inc. Been A Good Investment?

We think that the total shareholder return of 52%, over three years, would leave most ScanSource, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for ScanSource that investors should be aware of in a dynamic business environment.

Important note: ScanSource is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.