In 2014 Gregg Sengstack was appointed CEO of Franklin Electric Co., Inc. (NASDAQ:FELE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Gregg Sengstack's Compensation Compare With Similar Sized Companies?
According to our data, Franklin Electric Co., Inc. has a market capitalization of US$2.2b, and pays its CEO total annual compensation worth US$5.1m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$765k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
That means Gregg Sengstack receives fairly typical remuneration for the CEO of a company that size. 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, below, how CEO compensation at Franklin Electric has changed over time.
Is Franklin Electric Co., Inc. Growing?
Over the last three years Franklin Electric Co., Inc. has grown its earnings per share (EPS) by an average of 9.0% per year (using a line of best fit). It achieved revenue growth of 5.3% over the last year.
I'm not particularly impressed by the revenue growth, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Franklin Electric Co., Inc. Been A Good Investment?
With a total shareholder return of 30% over three years, Franklin Electric Co., Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Gregg Sengstack 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. So you may want to check if insiders are buying Franklin Electric shares with their own money (free access).
If you want to buy a stock that is better than Franklin Electric, this free list of high return, low debt companies is a great place to look.
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