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Is American Axle & Manufacturing Holdings, Inc.'s (NYSE:AXL) CEO Being Overpaid?

Simply Wall St

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David Dauch has been the CEO of American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for American Axle & Manufacturing Holdings

How Does David Dauch's Compensation Compare With Similar Sized Companies?

According to our data, American Axle & Manufacturing Holdings, Inc. has a market capitalization of US$1.3b, and pays its CEO total annual compensation worth US$9.5m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.

It would therefore appear that American Axle & Manufacturing Holdings, Inc. pays David Dauch more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at American Axle & Manufacturing Holdings, below.

NYSE:AXL CEO Compensation, July 9th 2019

Is American Axle & Manufacturing Holdings, Inc. Growing?

Over the last three years American Axle & Manufacturing Holdings, Inc. has shrunk its earnings per share by an average of 31% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has American Axle & Manufacturing Holdings, Inc. Been A Good Investment?

With a three year total loss of 27%, American Axle & Manufacturing Holdings, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by American Axle & Manufacturing Holdings, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling American Axle & Manufacturing Holdings (free visualization of insider trades).

If you want to buy a stock that is better than American Axle & Manufacturing Holdings, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.