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Here's Why Shareholders May Want To Be Cautious With Increasing Insteel Industries, Inc.'s (NYSE:IIIN) CEO Pay Packet

Simply Wall St
·3-min read

Performance at Insteel Industries, Inc. (NYSE:IIIN) has been reasonably good and CEO Howard Woltz 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 14 February 2023. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Insteel Industries

Comparing Insteel Industries, Inc.'s CEO Compensation With The Industry

According to our data, Insteel Industries, Inc. has a market capitalization of US$599m, and paid its CEO total annual compensation worth US$2.5m over the year to October 2022. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$682k.

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On examining similar-sized companies in the American Building industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$186k. Hence, we can conclude that Howard Woltz is remunerated higher than the industry median. Moreover, Howard Woltz also holds US$21m worth of Insteel Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2022

2021

Proportion (2022)

Salary

US$682k

US$666k

27%

Other

US$1.8m

US$1.8m

73%

Total Compensation

US$2.5m

US$2.5m

100%

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. It's interesting to note that Insteel Industries pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Insteel Industries, Inc.'s Growth Numbers

Insteel Industries, Inc. has seen its earnings per share (EPS) increase by 281% a year over the past three years. Its revenue is up 26% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Insteel Industries, Inc. Been A Good Investment?

We think that the total shareholder return of 69%, over three years, would leave most Insteel Industries, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Insteel Industries that investors should look into moving forward.

Switching gears from Insteel Industries, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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