It Looks Like Shareholders Would Probably Approve Daifuku Co., Ltd.'s (TSE:6383) CEO Compensation Package
Key Insights
- Daifuku will host its Annual General Meeting on 28th of March
- Salary of JP¥60.0m is part of CEO Hiroshi Geshiro's total remuneration
- The overall pay is comparable to the industry average
- Over the past three years, Daifuku's EPS grew by 29% and over the past three years, the total shareholder return was 36%
We have been pretty impressed with the performance at Daifuku Co., Ltd. (TSE:6383) recently and CEO Hiroshi Geshiro deserves a mention for their role in it. Coming up to the next AGM on 28th of March, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
See our latest analysis for Daifuku
How Does Total Compensation For Hiroshi Geshiro Compare With Other Companies In The Industry?
Our data indicates that Daifuku Co., Ltd. has a market capitalization of JP¥1.4t, and total annual CEO compensation was reported as JP¥182m for the year to March 2024. That's a modest increase of 7.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at JP¥60m.
On examining similar-sized companies in the Japanese Machinery industry with market capitalizations between JP¥596b and JP¥1.8t, we discovered that the median CEO total compensation of that group was JP¥172m. From this we gather that Hiroshi Geshiro is paid around the median for CEOs in the industry. Furthermore, Hiroshi Geshiro directly owns JP¥148m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | JP¥60m | JP¥59m | 33% |
| Other | JP¥122m | JP¥111m | 67% |
| Total Compensation | JP¥182m | JP¥170m | 100% |
Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. It's interesting to note that Daifuku allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Daifuku Co., Ltd.'s Growth
Over the past three years, Daifuku Co., Ltd. has seen its earnings per share (EPS) grow by 29% per year. Its revenue is up 21% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Daifuku Co., Ltd. Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Daifuku Co., Ltd. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Daifuku that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
About TSE:6383
Daifuku
Provides consulting, engineering, design, manufacture, installation, and after-sales services for logistics systems and material handling equipment in Japan and internationally.
Flawless balance sheet with solid track record.
