Here's Why AZZ Inc.'s (NYSE:AZZ) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• AZZ to hold its Annual General Meeting on 8th of July
• CEO Tom Ferguson's total compensation includes salary of US$963.8k
• The total compensation is similar to the average for the industry
• Over the past three years, AZZ's EPS fell by 4.4% and over the past three years, the total shareholder return was 145%

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Despite strong share price growth of 145% for AZZ Inc. (NYSE:AZZ) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 8th of July may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for AZZ

How Does Total Compensation For Tom Ferguson Compare With Other Companies In The Industry?

At the time of writing, our data shows that AZZ Inc. has a market capitalization of US$2.8b, and reported total annual CEO compensation of US$5.4m for the year to February 2025. We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$964k.

On examining similar-sized companies in the American Building industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$6.0m. This suggests that AZZ remunerates its CEO largely in line with the industry average. What's more, Tom Ferguson holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2025	2024	Proportion (2025)
Salary	US$964k	US$940k	18%
Other	US$4.4m	US$3.4m	82%
Total Compensation	US$5.4m	US$4.4m	100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. According to our research, AZZ has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at AZZ Inc.'s Growth Numbers

Over the last three years, AZZ Inc. has shrunk its earnings per share by 4.4% per year. It achieved revenue growth of 2.6% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has AZZ Inc. Been A Good Investment?

We think that the total shareholder return of 145%, over three years, would leave most AZZ Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for AZZ (1 is concerning!) that you should be aware of before investing here.

Important note: AZZ is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.