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CEO Rich Kyle has done a decent job of delivering relatively good performance at The Timken Company (NYSE:TKR) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 07 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.
Comparing The Timken Company's CEO Compensation With the industry
At the time of writing, our data shows that The Timken Company has a market capitalization of US$6.6b, and reported total annual CEO compensation of US$11m for the year to December 2020. We note that's a small decrease of 5.2% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$843k.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$6.5m. This suggests that Rich Kyle is paid more than the median for the industry. Furthermore, Rich Kyle directly owns US$26m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. In Timken's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at The Timken Company's Growth Numbers
The Timken Company has seen its earnings per share (EPS) increase by 10% a year over the past three years. Its revenue is down 3.2% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has The Timken Company Been A Good Investment?
We think that the total shareholder return of 108%, over three years, would leave most The Timken Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Timken that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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.
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