Key Insights
- Garrett Motion to hold its Annual General Meeting on 22nd of May
- Salary of US$1.06m is part of CEO Olivier Rabiller's total remuneration
- The total compensation is similar to the average for the industry
- Over the past three years, Garrett Motion's EPS fell by 6.5% and over the past three years, the total shareholder return was 104%
Despite strong share price growth of 104% for Garrett Motion Inc. (NASDAQ:GTX) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 22nd of May. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Check out our latest analysis for Garrett Motion
How Does Total Compensation For Olivier Rabiller Compare With Other Companies In The Industry?
At the time of writing, our data shows that Garrett Motion Inc. has a market capitalization of US$2.4b, and reported total annual CEO compensation of US$8.7m for the year to December 2024. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the American Auto Components industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$11m. So it looks like Garrett Motion compensates Olivier Rabiller in line with the median for the industry. What's more, Olivier Rabiller holds US$7.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.1m | US$1.1m | 12% |
| Other | US$7.6m | US$6.7m | 88% |
| Total Compensation | US$8.7m | US$7.8m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Garrett Motion sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Garrett Motion Inc.'s Growth
Over the last three years, Garrett Motion Inc. has shrunk its earnings per share by 6.5% per year. Its revenue is down 10% over the previous year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Garrett Motion Inc. Been A Good Investment?
We think that the total shareholder return of 104%, over three years, would leave most Garrett Motion Inc. shareholders smiling. 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...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for Garrett Motion (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Garrett Motion, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Valuation is complex, but we're here to simplify it.
Discover if Garrett Motion might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.