Stoneridge, Inc.'s (NYSE:SRI) CEO Compensation Looks Acceptable To Us And Here's Why

The share price of Stoneridge, Inc. (NYSE:SRI) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 11 May 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Stoneridge

How Does Total Compensation For Jon DeGaynor Compare With Other Companies In The Industry?

According to our data, Stoneridge, Inc. has a market capitalization of US$896m, and paid its CEO total annual compensation worth US$4.0m over the year to December 2020. Notably, that's an increase of 20% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$842k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.1m. From this we gather that Jon DeGaynor is paid around the median for CEOs in the industry. Moreover, Jon DeGaynor also holds US$5.9m worth of Stoneridge stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$842k	US$825k	21%
Other	US$3.1m	US$2.5m	79%
Total Compensation	US$4.0m	US$3.3m	100%

Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. Our data reveals that Stoneridge allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Stoneridge, Inc.'s Growth Numbers

Over the last three years, Stoneridge, Inc. has shrunk its earnings per share by 58% per year. In the last year, its revenue is down 18%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Stoneridge, Inc. Been A Good Investment?

Stoneridge, Inc. has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Stoneridge that you should be aware of before investing.

Switching gears from Stoneridge, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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