Key Insights
- LSI Industries' Annual General Meeting to take place on 1st of November
- Total pay for CEO James Clark includes US$708.0k salary
- Total compensation is similar to the industry average
- Over the past three years, LSI Industries' EPS grew by 36% and over the past three years, the total shareholder return was 114%
The performance at LSI Industries Inc. (NASDAQ:LYTS) has been quite strong recently and CEO James Clark has played a role in it. Coming up to the next AGM on 1st of November, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
View our latest analysis for LSI Industries
Comparing LSI Industries Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that LSI Industries Inc. has a market capitalization of US$413m, and reported total annual CEO compensation of US$3.7m for the year to June 2023. That's a notable increase of 52% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$708k.
On comparing similar companies from the American Electrical industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$4.4m. This suggests that LSI Industries remunerates its CEO largely in line with the industry average. Furthermore, James Clark directly owns US$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | US$708k | US$615k | 19% |
| Other | US$3.0m | US$1.8m | 81% |
| Total Compensation | US$3.7m | US$2.5m | 100% |
Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. Although there is a difference in how total compensation is set, LSI Industries more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at LSI Industries Inc.'s Growth Numbers
LSI Industries Inc. has seen its earnings per share (EPS) increase by 36% a year over the past three years. Its revenue is up 9.2% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has LSI Industries Inc. Been A Good Investment?
We think that the total shareholder return of 114%, over three years, would leave most LSI Industries 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.
To Conclude...
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for LSI Industries that investors should be aware of in a dynamic business environment.
Switching gears from LSI 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.
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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.