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As many shareholders of Steel & Tube Holdings Limited (NZSE:STU) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30 September 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Comparing Steel & Tube Holdings Limited's CEO Compensation With the industry
According to our data, Steel & Tube Holdings Limited has a market capitalization of NZ$172m, and paid its CEO total annual compensation worth NZ$994k over the year to June 2021. That's a notable increase of 41% on last year. In particular, the salary of NZ$721.1k, 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 under NZ$285m, the reported median total CEO compensation was NZ$316k. Accordingly, our analysis reveals that Steel & Tube Holdings Limited pays Mark Malpass north of the industry median. What's more, Mark Malpass holds NZ$331k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Our data reveals that Steel & Tube Holdings allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Steel & Tube Holdings Limited's Growth
Over the past three years, Steel & Tube Holdings Limited has seen its earnings per share (EPS) grow by 35% per year. It achieved revenue growth of 15% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Steel & Tube Holdings Limited Been A Good Investment?
Given the total shareholder loss of 9.7% over three years, many shareholders in Steel & Tube Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Steel & Tube Holdings that you should be aware of before investing.
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.
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.
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