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How Should Investors Feel About AAON, Inc.'s (NASDAQ:AAON) CEO Pay?

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·3 min read
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Norm Asbjornson has been the CEO of AAON, Inc. (NASDAQ:AAON) since 1989. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for AAON

How Does Norm Asbjornson's Compensation Compare With Similar Sized Companies?

According to our data, AAON, Inc. has a market capitalization of US$2.8b, and paid its CEO total annual compensation worth US$1.9m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$481k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.

Most shareholders would consider it a positive that Norm Asbjornson takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at AAON has changed over time.

NasdaqGS:AAON CEO Compensation, January 30th 2020
NasdaqGS:AAON CEO Compensation, January 30th 2020

Is AAON, Inc. Growing?

Over the last three years AAON, Inc. has shrunk its earnings per share by an average of 3.6% per year (measured with a line of best fit). In the last year, its revenue is up 7.8%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has AAON, Inc. Been A Good Investment?

Boasting a total shareholder return of 62% over three years, AAON, Inc. 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.

In Summary...

It looks like AAON, Inc. pays its CEO less than similar sized companies.

Norm Asbjornson receives relatively low remuneration compared to similar sized companies. And while the company isn't growing earnings per share, total returns have been pleasing. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at AAON.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.