Shareholders May Be Wary Of Increasing Great Lakes Dredge & Dock Corporation's (NASDAQ:GLDD) CEO Compensation Package
Key Insights
Great Lakes Dredge & Dock's Annual General Meeting to take place on 9th of May
Total pay for CEO Lasse Petterson includes US$785.0k salary
Total compensation is 34% above industry average
Great Lakes Dredge & Dock's EPS declined by 41% over the past three years while total shareholder loss over the past three years was 51%
The results at Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) have been quite disappointing recently and CEO Lasse Petterson bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 9th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Great Lakes Dredge & Dock
How Does Total Compensation For Lasse Petterson Compare With Other Companies In The Industry?
According to our data, Great Lakes Dredge & Dock Corporation has a market capitalization of US$456m, and paid its CEO total annual compensation worth US$3.2m over the year to December 2023. We note that's a decrease of 15% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$785k.
On comparing similar companies from the American Construction industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.4m. Accordingly, our analysis reveals that Great Lakes Dredge & Dock Corporation pays Lasse Petterson north of the industry median. Moreover, Lasse Petterson also holds US$6.3m worth of Great Lakes Dredge & Dock stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$785k | US$785k | 24% |
Other | US$2.4m | US$3.0m | 76% |
Total Compensation | US$3.2m | US$3.8m | 100% |
On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Great Lakes Dredge & Dock is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Great Lakes Dredge & Dock Corporation's Growth
Great Lakes Dredge & Dock Corporation has reduced its earnings per share by 41% a year over the last three years. It saw its revenue drop 9.1% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Great Lakes Dredge & Dock Corporation Been A Good Investment?
Few Great Lakes Dredge & Dock Corporation shareholders would feel satisfied with the return of -51% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which makes us a bit uncomfortable) in Great Lakes Dredge & Dock we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
