U.S. markets open in 4 hours 3 minutes
  • S&P Futures

    3,421.75
    -30.00 (-0.87%)
     
  • Dow Futures

    27,942.00
    -247.00 (-0.88%)
     
  • Nasdaq Futures

    11,572.25
    -91.25 (-0.78%)
     
  • Russell 2000 Futures

    1,617.70
    -17.90 (-1.09%)
     
  • Crude Oil

    38.80
    -1.05 (-2.63%)
     
  • Gold

    1,902.00
    -3.20 (-0.17%)
     
  • Silver

    24.26
    -0.41 (-1.66%)
     
  • EUR/USD

    1.1811
    -0.0057 (-0.48%)
     
  • 10-Yr Bond

    0.8410
    0.0000 (0.00%)
     
  • Vix

    29.84
    +1.73 (+6.15%)
     
  • GBP/USD

    1.3030
    -0.0008 (-0.06%)
     
  • USD/JPY

    104.8480
    +0.1580 (+0.15%)
     
  • BTC-USD

    13,072.57
    -4.45 (-0.03%)
     
  • CMC Crypto 200

    262.68
    +1.22 (+0.47%)
     
  • FTSE 100

    5,862.27
    +1.99 (+0.03%)
     
  • Nikkei 225

    23,494.34
    -22.25 (-0.09%)
     

Is Standard Motor Products, Inc. (NYSE:SMP) Excessively Paying Its CEO?

Simply Wall St
·3 mins read

In 2016 Eric Sills was appointed CEO of Standard Motor Products, Inc. (NYSE:SMP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Standard Motor Products

How Does Eric Sills's Compensation Compare With Similar Sized Companies?

According to our data, Standard Motor Products, Inc. has a market capitalization of US$912m, and paid its CEO total annual compensation worth US$1.0m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$3.1m.

Most shareholders would consider it a positive that Eric Sills takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at Standard Motor Products has changed over time.

NYSE:SMP CEO Compensation, March 16th 2020
NYSE:SMP CEO Compensation, March 16th 2020

Is Standard Motor Products, Inc. Growing?

Standard Motor Products, Inc. has increased its earnings per share (EPS) by an average of 4.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.2%.

I'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.

Has Standard Motor Products, Inc. Been A Good Investment?

With a three year total loss of 13%, Standard Motor Products, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It appears that Standard Motor Products, Inc. remunerates its CEO below most similar sized companies.

It's well worth noting that while Eric Sills is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. Looking into other areas, we've picked out 1 warning sign for Standard Motor Products that investors should think about before committing capital to this stock.

If you want to buy a stock that is better than Standard Motor Products, this free list of high return, low debt companies is a great place to look.

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.