Why we think shareholders might consider raising the CEO compensation of Titan Machinery Inc. (NASDAQ: TITN)

Shareholders will be delighted with the impressive results Titan Machinery Inc. (NASDAQ: TITN) recently and CEO David Meyer played a key role. At the next annual general meeting on June 7, 2021, they will have the opportunity to hear the board of directors review the company’s results, discuss future strategy and vote on any resolution such as executive compensation. We think the CEO has done a pretty decent job and probably deserves a well-deserved pay raise.

Check out our latest review for Titan Machinery

How does David Meyer’s total compensation compare to other companies in the industry?

Our data indicates that Titan Machinery Inc. has a market cap of US $ 678 million, and the CEO’s total annual compensation has been reported to be US $ 484,000 for the year through January 2021. That’s essentially flat by compared to the remuneration of the previous year. In particular, the salary of US $ 475,000 represents a considerable portion of the total compensation paid to the CEO.

Looking at similar-sized companies in the industry, with market capitalizations between $ 400 million and $ 1.6 billion, we found that the median total compensation for CEOs in this group was $ 1.5 million. As a result, Titan Machinery pays its CEO below the industry median. In addition, David Meyer also owns $ 69 million in Titan Machinery shares directly under his own name, which tells us that they have a significant personal interest in the company.

Component 2021 2020 Proportion (2021)
Salary US $ 475K US $ 475K 98%
Other $ 8.6K US $ 8.4K 2%
Total compensation US $ 484K US $ 483K 100%

At the industry level, around 24% of total compensation is salary and 76% other compensation. Titan Machinery has taken a largely traditional route, paying David Meyer a high salary, giving him preference over non-salary benefits. If salary is the main component of total compensation, this suggests that the CEO receives a higher fixed proportion of total compensation, regardless of performance.

NasdaqGS: Compensation of the CEO of TITN June 1, 2021

Growth of Titan Machinery Inc.

Titan Machinery Inc.’s earnings per share (EPS) have grown 41% per year over the past three years. It has achieved 10% revenue growth over the past year.

Shareholders would be happy to know that the company has improved over the past few years. It’s also good to see decent revenue growth over the past year, which suggests the business is healthy and growing. Going forward, you might want to check out this free visual report at analyst forecasts for the future profits of the company.

Was Titan Machinery Inc. a good investment?

Most shareholders would likely be happy with Titan Machinery Inc. for its 76% three-year total return. As a result, some may think that the CEO should be paid more than normal for companies of similar size.

To conclude…

Titan Machinery pays its CEO a majority of compensation in the form of salary. Since the company has performed relatively well, the CEO compensation policy may not be the focus of the AGM. In fact, strategic decisions that could impact the future of the business could be a much more interesting topic for investors, as it would help them set their long-term expectations.

While paying attention to CEOs is important, investors should consider other parts of the business as well. That’s why we dug and identified 2 warning signs for Titan Machinery that investors should think about before committing any capital to this stock.

Gear shifting from Titan Machinery, if you are looking for an impeccable balance sheet and premium yields, this free The list of high yield, low debt companies is a good place to look.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in any of the stocks mentioned.
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