In 2012 Frank Krejci was appointed CEO of Strattec Security Corporation (NASDAQ:STRT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Frank Krejci’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Strattec Security Corporation has a market cap of US$82m, and is paying total annual CEO compensation of US$705k. (This figure is for the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at US$429k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$473k.
Thus we can conclude that Frank Krejci receives more in total compensation than the median of a group of companies in the same market, and of similar size to Strattec Security Corporation. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Strattec Security, below.
Is Strattec Security Corporation Growing?
Over the last three years Strattec Security Corporation has shrunk its earnings per share by an average of 42% per year (measured with a line of best fit). It achieved revenue growth of 10% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Strattec Security Corporation Been A Good Investment?
Since shareholders would have lost about 46% over three years, some Strattec Security Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Strattec Security Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Strattec Security shares with their own money (free access).
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.
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