Yahoo Finance We Think The Compensation For NL Industries, Inc.'s (NYSE:NL) CEO Looks About Right
Key Insights
NL Industries to hold its Annual General Meeting on 16th of May
CEO Courtney Riley's total compensation includes salary of US$1.40m
The overall pay is 63% below the industry average
NL Industries' EPS declined by 25% over the past three years while total shareholder return over the past three years was 31%
The performance at NL Industries, Inc. (NYSE:NL) has been rather lacklustre of late and shareholders may be wondering what CEO Courtney Riley is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 16th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.
See our latest analysis for NL Industries
How Does Total Compensation For Courtney Riley Compare With Other Companies In The Industry?
According to our data, NL Industries, Inc. has a market capitalization of US$423m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2023. We note that's an increase of 30% above last year. Notably, the salary of US$1.4m is the entirety of the CEO compensation.
On comparing similar companies from the American Commercial Services industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$3.8m. This suggests that Courtney Riley is paid below the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.4m | US$1.1m | 100% |
Other | - | - | - |
Total Compensation | US$1.4m | US$1.1m | 100% |
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. On a company level, NL Industries prefers to reward its CEO through a salary, opting not to pay Courtney Riley through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at NL Industries, Inc.'s Growth Numbers
Over the last three years, NL Industries, Inc. has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 4.6%.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has NL Industries, Inc. Been A Good Investment?
With a total shareholder return of 31% over three years, NL Industries, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
NL Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.
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 NL Industries that investors should look into moving forward.
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.
