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The decent performance at Gentex Corporation (NASDAQ:GNTX) recently will please most shareholders as they go into the AGM coming up on 20 May 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.
Comparing Gentex Corporation's CEO Compensation With the industry
According to our data, Gentex Corporation has a market capitalization of US$8.3b, and paid its CEO total annual compensation worth US$3.5m over the year to December 2020. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$764k.
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$9.8m. This suggests that Steve Downing is paid below the industry median. What's more, Steve Downing holds US$4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Our data reveals that Gentex allocates salary more or less in line with the wider market. 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 Gentex Corporation's Growth Numbers
Gentex Corporation saw earnings per share stay pretty flat over the last three years. It saw its revenue drop 6.8% over the last year.
We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Gentex Corporation Been A Good Investment?
Most shareholders would probably be pleased with Gentex Corporation for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
Shareholders may want to check for free if Gentex insiders are buying or selling shares.
Important note: Gentex is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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