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Frank Krejci has been the CEO of Strattec Security Corporation (NASDAQ:STRT) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Frank Krejci’s Compensation Compare With Similar Sized Companies?
According to our data, Strattec Security Corporation has a market capitalization of US$117m, and pays its CEO total annual compensation worth US$705k. (This figure is for the year to 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 compensation in that group is US$300k.
As you can see, Frank Krejci is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Strattec Security Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Strattec Security has changed from year to year.
Is Strattec Security Corporation Growing?
On average over the last three years, Strattec Security Corporation has shrunk earnings per share by 22% each year (measured with a line of best fit). It achieved revenue growth of 9.4% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Strattec Security Corporation Been A Good Investment?
With a three year total loss of 28%, Strattec Security Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Strattec Security Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Strattec Security.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.