We Think Some Shareholders May Hesitate To Increase American Axle & Manufacturing Holdings, Inc.'s (NYSE:AXL) CEO Compensation

Key Insights

• American Axle & Manufacturing Holdings' Annual General Meeting to take place on 1st of May
• Total pay for CEO David Dauch includes US$1.25m salary
• Total compensation is 444% above industry average
• American Axle & Manufacturing Holdings' EPS grew by 79% over the past three years while total shareholder loss over the past three years was 45%

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The underwhelming share price performance of American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 1st of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis 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$401m, and paid its CEO total annual compensation worth US$11m over the year to December 2024. That's a notable decrease of 8.8% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

In comparison with other companies in the American Auto Components industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.0m. Hence, we can conclude that David Dauch is remunerated higher than the industry median. Furthermore, David Dauch directly owns US$8.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.3m	US$1.3m	11%
Other	US$9.9m	US$11m	89%
Total Compensation	US$11m	US$12m	100%

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. American Axle & Manufacturing Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at American Axle & Manufacturing Holdings, Inc.'s Growth Numbers

Over the past three years, American Axle & Manufacturing Holdings, Inc. has seen its earnings per share (EPS) grow by 79% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has American Axle & Manufacturing Holdings, Inc. Been A Good Investment?

With a total shareholder return of -45% over three years, American Axle & Manufacturing Holdings, Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in American Axle & Manufacturing Holdings we think you should know about.

Important note: American Axle & Manufacturing Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.