David Dauch has been the CEO of American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for American Axle & Manufacturing Holdings.
Comparing American Axle & Manufacturing Holdings, Inc.'s CEO Compensation With the industry
According to our data, American Axle & Manufacturing Holdings, Inc. has a market capitalization of US$761m, and paid its CEO total annual compensation worth US$7.7m over the year to December 2019. That's a notable decrease of 19% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$3.3m. Accordingly, our analysis reveals that American Axle & Manufacturing Holdings, Inc. pays David Dauch north of the industry median. What's more, David Dauch holds US$5.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. In American Axle & Manufacturing Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
American Axle & Manufacturing Holdings, Inc.'s Growth
Over the last three years, American Axle & Manufacturing Holdings, Inc. has shrunk its earnings per share by 117% per year. It saw its revenue drop 31% over the last 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has American Axle & Manufacturing Holdings, Inc. Been A Good Investment?
Since shareholders would have lost about 65% over three years, some American Axle & Manufacturing Holdings, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, American Axle & Manufacturing Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in American Axle & Manufacturing Holdings we think you should know about.
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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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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