Key Insights

• Beacon Roofing Supply to hold its Annual General Meeting on 15th of May

• Salary of US$929.8k is part of CEO Julian Francis's total remuneration

• Total compensation is similar to the industry average

• Beacon Roofing Supply's EPS declined by 21% over the past three years while total shareholder return over the past three years was 62%

Beacon Roofing Supply, Inc. (NASDAQ:BECN) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 15th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Beacon Roofing Supply

How Does Total Compensation For Julian Francis Compare With Other Companies In The Industry?

At the time of writing, our data shows that Beacon Roofing Supply, Inc. has a market capitalization of US$5.9b, and reported total annual CEO compensation of US$6.2m for the year to December 2023. That's a fairly small increase of 4.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$930k.

In comparison with other companies in the American Trade Distributors industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.4m. From this we gather that Julian Francis is paid around the median for CEOs in the industry. What's more, Julian Francis holds US$9.3m 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 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. There isn't a significant difference between Beacon Roofing Supply and the broader market, in terms of salary allocation in the overall compensation package. 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 Beacon Roofing Supply, Inc.'s Growth Numbers

Over the last three years, Beacon Roofing Supply, Inc. has shrunk its earnings per share by 21% per year. It achieved revenue growth of 9.7% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Beacon Roofing Supply, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Beacon Roofing Supply, Inc. for providing a total return of 62% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 Beacon Roofing Supply that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.