Key Insights

• LCI Industries' Annual General Meeting to take place on 16th of May
• CEO Jason Lippert's total compensation includes salary of US$1.16m
• The overall pay is 39% above the industry average
• Over the past three years, LCI Industries' EPS fell by 23% and over the past three years, the total loss to shareholders 7.8%

LCI Industries (NYSE:LCII) has not performed well recently and CEO Jason Lippert will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 16th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

How Does Total Compensation For Jason Lippert Compare With Other Companies In The Industry?

At the time of writing, our data shows that LCI Industries has a market capitalization of US$2.8b, and reported total annual CEO compensation of US$8.6m for the year to December 2023. That's a notable decrease of 18% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the American Auto Components industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.2m. This suggests that Jason Lippert is paid more than the median for the industry. Moreover, Jason Lippert also holds US$44m worth of LCI Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Our data reveals that LCI Industries allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

LCI Industries' Growth

Over the last three years, LCI Industries has shrunk its earnings per share by 23% per year. Its revenue is down 17% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 LCI Industries Been A Good Investment?

With a three year total loss of 7.8% for the shareholders, LCI Industries would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for LCI Industries that investors should look into moving forward.

Important note: LCI Industries 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.

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.