We Think Proto Labs, Inc.'s (NYSE:PRLB) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Proto Labs will host its Annual General Meeting on 20th of May
• Salary of US$620.0k is part of CEO Rob Bodor's total remuneration
• The overall pay is comparable to the industry average
• Proto Labs' EPS declined by 21% over the past three years while total shareholder loss over the past three years was 6.4%

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Shareholders will probably not be too impressed with the underwhelming results at Proto Labs, Inc. (NYSE:PRLB) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Proto Labs

Comparing Proto Labs, Inc.'s CEO Compensation With The Industry

Our data indicates that Proto Labs, Inc. has a market capitalization of US$990m, and total annual CEO compensation was reported as US$4.3m for the year to December 2024. Notably, that's a decrease of 16% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$620k.

For comparison, other companies in the American Machinery industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.7m. So it looks like Proto Labs compensates Rob Bodor in line with the median for the industry. Furthermore, Rob Bodor directly owns US$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$620k	US$600k	14%
Other	US$3.7m	US$4.5m	86%
Total Compensation	US$4.3m	US$5.1m	100%

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Our data reveals that Proto Labs allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Proto Labs, Inc.'s Growth Numbers

Proto Labs, Inc. has reduced its earnings per share by 21% a year over the last three years. In the last year, its revenue is down 1.3%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Proto Labs, Inc. Been A Good Investment?

Given the total shareholder loss of 6.4% over three years, many shareholders in Proto Labs, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Proto Labs (free visualization of insider trades).

Switching gears from Proto Labs, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.