Key Insights

• PetIQ's Annual General Meeting to take place on 7th of June
• Total pay for CEO Cord Christensen includes US$1.05m salary
• The overall pay is 69% above the industry average
• PetIQ's EPS grew by 63% over the past three years while total shareholder loss over the past three years was 46%

The underwhelming share price performance of PetIQ, Inc. (NASDAQ:PETQ) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 7th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

How Does Total Compensation For Cord Christensen Compare With Other Companies In The Industry?

Our data indicates that PetIQ, Inc. has a market capitalization of US$612m, and total annual CEO compensation was reported as US$4.7m for the year to December 2023. That's a notable increase of 22% 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 Healthcare industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$2.8m. This suggests that Cord Christensen is paid more than the median for the industry. Moreover, Cord Christensen also holds US$3.0m worth of PetIQ stock directly under their own name.

Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Although there is a difference in how total compensation is set, PetIQ more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at PetIQ, Inc.'s Growth Numbers

Over the past three years, PetIQ, Inc. has seen its earnings per share (EPS) grow by 63% per year. Its revenue is up 20% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has PetIQ, Inc. Been A Good Investment?

Few PetIQ, Inc. shareholders would feel satisfied with the return of -46% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for PetIQ you should be aware of, and 1 of them doesn't sit too well with us.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.