It would be hard to discount the role that CEO Cheri Beranek has played in delivering the impressive results at Clearfield, Inc. (NASDAQ:CLFD) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 23 February 2023. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing Clearfield, Inc.'s CEO Compensation With The Industry
According to our data, Clearfield, Inc. has a market capitalization of US$940m, and paid its CEO total annual compensation worth US$2.0m over the year to September 2022. We note that's an increase of 30% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$374k.
For comparison, other companies in the American Communications industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.6m. From this we gather that Cheri Beranek is paid around the median for CEOs in the industry. What's more, Cheri Beranek holds US$27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Clearfield is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Clearfield, Inc.'s Growth
Clearfield, Inc. has seen its earnings per share (EPS) increase by 126% a year over the past three years. Its revenue is up 86% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Clearfield, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Clearfield, Inc. for providing a total return of 418% over three years. 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.
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in 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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Clearfield (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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.
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