Is Harley-Davidson, Inc.’s (NYSE:HOG) CEO Overpaid Relative To Its Peers?

Matt Levatich became the CEO of Harley-Davidson, Inc. (NYSE:HOG) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Harley-Davidson

How Does Matt Levatich’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Harley-Davidson, Inc. has a market cap of US$5.6b, and is paying total annual CEO compensation of US$11m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$7.0m.

As you can see, Matt Levatich is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Harley-Davidson, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. So this free report on the analyst consensus forecasts could help you make a master move on this stock.

You can see, below, how CEO compensation at Harley-Davidson has changed over time.

NYSE:HOG CEO Compensation January 7th 19
NYSE:HOG CEO Compensation January 7th 19

Is Harley-Davidson, Inc. Growing?

Over the last three years Harley-Davidson, Inc. has shrunk its earnings per share by an average of 8.7% per year. In the last year, its revenue is up 4.8%.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has Harley-Davidson, Inc. Been A Good Investment?

Given the total loss of 13% over three years, many shareholders in Harley-Davidson, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Harley-Davidson, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Harley-Davidson (free visualization of insider trades).

Important note: Harley-Davidson may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 editorial-team@simplywallst.com.