Shareholders Will Probably Not Have Any Issues With Crane Co.'s (NYSE:CR) CEO Compensation
Performance at Crane Co. (NYSE:CR) has been reasonably good and CEO Max Mitchell has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26 April 2021. Here is our take on why we think the CEO compensation looks appropriate.
View our latest analysis for Crane
Comparing Crane Co.'s CEO Compensation With the industry
Our data indicates that Crane Co. has a market capitalization of US$5.5b, and total annual CEO compensation was reported as US$6.4m for the year to December 2020. That's a notable decrease of 12% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$857k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$6.2m. From this we gather that Max Mitchell is paid around the median for CEOs in the industry. Furthermore, Max Mitchell directly owns US$22m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$857k | US$1.0m | 13% |
Other | US$5.5m | US$6.2m | 87% |
Total Compensation | US$6.4m | US$7.2m | 100% |
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. Crane sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Crane Co.'s Growth Numbers
Crane Co. has seen its earnings per share (EPS) increase by 2.4% a year over the past three years. Its revenue is down 11% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Crane Co. Been A Good Investment?
Crane Co. has generated a total shareholder return of 5.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Crane that investors should think about before committing capital to this stock.
Switching gears from Crane, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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