Frank Krejci has been the CEO of Strattec Security Corporation (NASDAQ:STRT) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Frank Krejci Compare With Other Companies In The Industry?
According to our data, Strattec Security Corporation has a market capitalization of US$216m, and paid its CEO total annual compensation worth US$562k over the year to June 2020. We note that's a decrease of 13% compared to last year. We note that the salary portion, which stands at US$465.9k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$288k. Accordingly, our analysis reveals that Strattec Security Corporation pays Frank Krejci north of the industry median. Furthermore, Frank Krejci directly owns US$2.7m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. It's interesting to note that Strattec Security pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Strattec Security Corporation's Growth
Strattec Security Corporation has reduced its earnings per share by 12% a year over the last three years. It saw its revenue drop 15% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Strattec Security Corporation Been A Good Investment?
Most shareholders would probably be pleased with Strattec Security Corporation for providing a total return of 56% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Strattec Security pays its CEO higher than the norm for similar-sized companies belonging to the same industry. We feel that EPS have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So while we would not say that Frank is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Strattec Security that investors should be aware of in a dynamic business environment.
Switching gears from Strattec Security, 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.
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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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