Key Insights

• Acuity Brands to hold its Annual General Meeting on 24th of January
• Salary of US$1.00m is part of CEO Neil Ashe's total remuneration
• The overall pay is comparable to the industry average
• Acuity Brands' total shareholder return over the past three years was 85% while its EPS grew by 24% over the past three years

The performance at Acuity Brands, Inc. (NYSE:AYI) has been quite strong recently and CEO Neil Ashe has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 24th of January. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Acuity Brands

How Does Total Compensation For Neil Ashe Compare With Other Companies In The Industry?

At the time of writing, our data shows that Acuity Brands, Inc. has a market capitalization of US$6.8b, and reported total annual CEO compensation of US$9.2m for the year to August 2023. That's a notable increase of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

On examining similar-sized companies in the American Electrical industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.9m. From this we gather that Neil Ashe is paid around the median for CEOs in the industry. Furthermore, Neil Ashe directly owns US$1.0m worth of shares in the company.

On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. It's interesting to note that Acuity Brands allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Acuity Brands, Inc.'s Growth

Acuity Brands, Inc. has seen its earnings per share (EPS) increase by 24% a year over the past three years. It saw its revenue drop 4.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Acuity Brands, Inc. Been A Good Investment?

We think that the total shareholder return of 85%, over three years, would leave most Acuity Brands, Inc. shareholders smiling. 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.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Acuity Brands that you should be aware of before investing.

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.

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.