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Eileen Drake became the CEO of Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Aerojet Rocketdyne Holdings.
How Does Total Compensation For Eileen Drake Compare With Other Companies In The Industry?
According to our data, Aerojet Rocketdyne Holdings, Inc. has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$7.3m over the year to December 2019. Notably, that's an increase of 31% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$862k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$8.0m. This suggests that Aerojet Rocketdyne Holdings remunerates its CEO largely in line with the industry average. Moreover, Eileen Drake also holds US$15m worth of Aerojet Rocketdyne Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Aerojet Rocketdyne Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Aerojet Rocketdyne Holdings, Inc.'s Growth Numbers
Aerojet Rocketdyne Holdings, Inc. has seen its earnings per share (EPS) increase by 84% a year over the past three years. It achieved revenue growth of 3.7% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Aerojet Rocketdyne Holdings, Inc. Been A Good Investment?
We think that the total shareholder return of 64%, over three years, would leave most Aerojet Rocketdyne Holdings, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, Aerojet Rocketdyne Holdings, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
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've identified 2 warning signs for Aerojet Rocketdyne Holdings that investors should be aware of in a dynamic business environment.
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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