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Shareholders will be pleased by the impressive results for Installed Building Products, Inc. (NYSE:IBP) recently and CEO Jeff Edwards has played a key role. At the upcoming AGM on 27 May 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
Check out our latest analysis for Installed Building Products
Comparing Installed Building Products, Inc.'s CEO Compensation With the industry
According to our data, Installed Building Products, Inc. has a market capitalization of US$3.4b, and paid its CEO total annual compensation worth US$4.1m over the year to December 2020. Notably, that's an increase of 20% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$721k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.5m. In other words, Installed Building Products pays its CEO lower than the industry median. Moreover, Jeff Edwards also holds US$675m worth of Installed Building Products stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$721k | US$674k | 18% |
| Other | US$3.4m | US$2.8m | 82% |
| Total Compensation | US$4.1m | US$3.4m | 100% |
On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. Installed Building Products sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Installed Building Products, Inc.'s Growth Numbers
Installed Building Products, Inc. has seen its earnings per share (EPS) increase by 37% a year over the past three years. Its revenue is up 8.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Installed Building Products, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Installed Building Products, Inc. for providing a total return of 87% over three years. 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.