Here's Why Shareholders Will Not Be Complaining About Nordson Corporation's (NASDAQ:NDSN) CEO Pay Packet
Key Insights
Nordson to hold its Annual General Meeting on 5th of March
CEO Naga Nagarajan's total compensation includes salary of US$975.0k
The overall pay is comparable to the industry average
Nordson's EPS grew by 22% over the past three years while total shareholder return over the past three years was 42%
We have been pretty impressed with the performance at Nordson Corporation (NASDAQ:NDSN) recently and CEO Naga Nagarajan deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 5th of March. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
View our latest analysis for Nordson
Comparing Nordson Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Nordson Corporation has a market capitalization of US$15b, and reported total annual CEO compensation of US$7.0m for the year to October 2023. We note that's a decrease of 17% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$975k.
In comparison with other companies in the American Machinery industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$9.2m. This suggests that Nordson remunerates its CEO largely in line with the industry average. Moreover, Naga Nagarajan also holds US$13m worth of Nordson stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$975k | US$900k | 14% |
Other | US$6.0m | US$7.5m | 86% |
Total Compensation | US$7.0m | US$8.4m | 100% |
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. In Nordson's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Nordson Corporation's Growth
Nordson Corporation's earnings per share (EPS) grew 22% per year over the last three years. It achieved revenue growth of 2.3% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Nordson Corporation Been A Good Investment?
Boasting a total shareholder return of 42% over three years, Nordson Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Nordson that investors should look into moving forward.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
