It appears the CEO of Comfort Systems USA, Inc. (NYSE:FIX) may be underpaid compared to his peers

Key insights

• Comfort Systems USA will hold its Annual General Meeting on May 17

• $1.00 million salary is part of CEO Brian Lane’s total compensation

• Total compensation is 39% lower than the industry average

• In the last three years, Comfort Systems USA EPS grew 33% and in the last three years, the total return to shareholders was 322%

The impressive results in Comfort Systems USA, Inc. (NYSE: CORRECTION) recently will be great news for shareholders. This would be kept in mind at the next Annual General Meeting on May 17th, which will be an opportunity to hear the board review financial results, discuss the company’s future strategy and vote on resolutions such as executive remuneration and other matters. Here we’ll show why we think the CEO’s compensation is appropriate and discuss the case for a pay raise.

See our latest analysis for Comfort Systems USA

How does Brian Lane’s total compensation compare to others in the industry?

Our data indicates that Comfort Systems USA, Inc. has a market capitalization of US$12 billion, and total annual CEO compensation is reported as US$6.6 million for the year to December 2023. This represents an increase a remarkable 23% compared to last year. Although this analysis focuses on total compensation, it is worth recognizing that the salary portion is smaller, valued at US$1.0 million.

For comparison purposes, other companies in the American construction industry with market capitalizations above $8.0 billion, reported average total CEO compensation of $11 million. In other words, Comfort Systems USA pays its CEO less than the industry median. Furthermore, Brian Lane directly owns $74 million worth of shares in the company, implying that he is deeply invested in the company’s success.

Speaking in terms of sector, salary represented approximately 20% of the total compensation of all the companies we analyzed, while other compensation represented 80% of the pie. Comfort Systems USA pays a modest share of compensation through salary compared to the overall industry. If non-salary compensation dominates total compensation, it is an indicator that the executive’s salary is tied to company performance.

CEO compensation

An analysis of Comfort Systems USA, Inc.’s growth numbers.

Comfort Systems USA, Inc.’s earnings per share (EPS) have grown 33% annually over the past three years. Last year, its revenue grew 26%.

Overall, this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth and improving earnings per share over the medium term certainly points to the type of growth we like to see. Looking to the future, you might want to check out this free visual report on analyst forecasts for the company’s future profits..

The story continues

Was Comfort Systems USA, Inc. a good investment?

Most shareholders would probably be pleased with Comfort Systems USA, Inc. for providing a total return of 322% over three years. This strong performance could mean that some shareholders wouldn’t mind if the CEO was paid more than is typical for a company of his size.

In short…

Given the company’s good performance, the CEO’s remuneration policy may not be the central point of focus for shareholders at the General Meeting. In fact, strategic decisions that could have an impact on the future of the business could be a much more interesting topic for investors, as it would help them define their long-term expectations.

CEO compensation is a crucial aspect to watch, but investors also need to keep their eyes open to other issues related to business performance. That’s why we did some research and identified 1 warning sign for Comfort Systems USA that you should know before investing.

Important note: Comfort Systems USA is an interesting stock, but we understand that investors may be looking for a free balance sheet and blockbuster returns. You might find something to improve in This list of interesting companies with high ROE and low debt.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St has no position in any of the stocks mentioned.

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