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Is EnerSys's (NYSE:ENS) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Dave Shaffer became the CEO of EnerSys (NYSE:ENS) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for EnerSys

How Does Dave Shaffer's Compensation Compare With Similar Sized Companies?

According to our data, EnerSys has a market capitalization of US$2.8b, and pays its CEO total annual compensation worth US$5.2m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$850k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.

So Dave Shaffer is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at EnerSys, below.

NYSE:ENS CEO Compensation, June 22nd 2019

Is EnerSys Growing?

EnerSys has increased its earnings per share (EPS) by an average of 4.8% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.8%.

I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.

Has EnerSys Been A Good Investment?

EnerSys has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Remuneration for Dave Shaffer is close enough to the median pay for a CEO of a similar sized company .

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling EnerSys shares (free trial).

If you want to buy a stock that is better than EnerSys, 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.