Shareholders May Be More Conservative With ScanSource, Inc.'s (NASDAQ:SCSC) CEO Compensation For Now

Key Insights

• ScanSource's Annual General Meeting to take place on 25th of January
• Salary of US$875.0k is part of CEO Mike Baur's total remuneration
• The overall pay is 56% above the industry average
• ScanSource's total shareholder return over the past three years was 41% while its EPS grew by 75% over the past three years

Performance at ScanSource, Inc. (NASDAQ:SCSC) has been reasonably good and CEO Mike Baur has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of January. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for ScanSource

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

At the time of writing, our data shows that ScanSource, Inc. has a market capitalization of US$947m, and reported total annual CEO compensation of US$5.7m for the year to June 2023. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$875k.

For comparison, other companies in the American Electronic industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.6m. Accordingly, our analysis reveals that ScanSource, Inc. pays Mike Baur north of the industry median. What's more, Mike Baur holds US$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. ScanSource pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at ScanSource, Inc.'s Growth Numbers

ScanSource, Inc. has seen its earnings per share (EPS) increase by 75% a year over the past three years. It achieved revenue growth of 2.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 ScanSource, Inc. Been A Good Investment?

We think that the total shareholder return of 41%, 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.

In Summary...

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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for ScanSource that investors should look into moving forward.

Switching gears from ScanSource, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.