Frank Krejci has been the CEO of Strattec Security Corporation (NASDAQ:STRT) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Frank Krejci's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Strattec Security Corporation has a market cap of US$78m, and is paying total annual CEO compensation of US$705k. (This number is for the twelve months until July 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$429k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$479k.
It would therefore appear that Strattec Security Corporation pays Frank Krejci 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, below, how CEO compensation at Strattec Security has changed over time.
Is Strattec Security Corporation Growing?
On average over the last three years, Strattec Security Corporation has shrunk earnings per share by 42% each year (measured with a line of best fit). Its revenue is up 10% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Strattec Security Corporation Been A Good Investment?
With a three year total loss of 52%, Strattec Security Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Strattec Security Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Strattec Security shares (free trial).
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.