Nicholas Pinchuk has been the CEO of Snap-on Incorporated (NYSE:SNA) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Nicholas Pinchuk Compare With Other Companies In The Industry?
According to our data, Snap-on Incorporated has a market capitalization of US$8.3b, and paid its CEO total annual compensation worth US$7.6m over the year to December 2019. We note that's a decrease of 15% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.8m. From this we gather that Nicholas Pinchuk is paid around the median for CEOs in the industry. Furthermore, Nicholas Pinchuk directly owns US$81m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Snap-on is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Snap-on Incorporated's Growth Numbers
Over the past three years, Snap-on Incorporated has seen its earnings per share (EPS) grow by 2.0% per year. It saw its revenue drop 7.0% over the last year.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Snap-on Incorporated Been A Good Investment?
Snap-on Incorporated has not done too badly by shareholders, with a total return of 8.6%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we noted earlier, Snap-on pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Nicholas should get a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Snap-on 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.
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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