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Is Franklin Electric Co., Inc.’s (NASDAQ:FELE) CEO Paid At A Competitive Rate?

Brandon Murphy

Gregg Sengstack has been the CEO of Franklin Electric Co., Inc. (NASDAQ:FELE) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Franklin Electric

How Does Gregg Sengstack’s Compensation Compare With Similar Sized Companies?

Our data indicates that Franklin Electric Co., Inc. is worth US$2.0b, and total annual CEO compensation is US$4.8m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$730k. 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$3.7m.

So Gregg Sengstack receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Franklin Electric has changed from year to year.

NasdaqGS:FELE CEO Compensation January 5th 19

Is Franklin Electric Co., Inc. Growing?

Franklin Electric Co., Inc. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years Its revenue is up 18% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Franklin Electric Co., Inc. Been A Good Investment?

I think that the total shareholder return of 85%, over three years, would leave most Franklin Electric Co., 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…

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

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Franklin Electric shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.