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Is SPX Corporation's (NYSE:SPXC) CEO Being Overpaid?

Simply Wall St

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In 2015 Gene Lowe was appointed CEO of SPX Corporation (NYSE:SPXC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.

See our latest analysis for SPX

How Does Gene Lowe's Compensation Compare With Similar Sized Companies?

Our data indicates that SPX Corporation is worth US$1.5b, and total annual CEO compensation is US$5.3m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$846k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.

It would therefore appear that SPX Corporation pays Gene Lowe more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at SPX, below.

NYSE:SPXC CEO Compensation, July 15th 2019

Is SPX Corporation Growing?

On average over the last three years, SPX Corporation has grown earnings per share (EPS) by 84% each year (using a line of best fit). Its revenue is up 6.5% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has SPX Corporation Been A Good Investment?

Most shareholders would probably be pleased with SPX Corporation for providing a total return of 112% over three years. 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.

In Summary...

We compared total CEO remuneration at SPX Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at SPX.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.