Should Shareholders Reconsider Astronics Corporation's (NASDAQ:ATRO) CEO Compensation Package?

Shareholders will probably not be too impressed with the underwhelming results at Astronics Corporation (NASDAQ:ATRO) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25 May 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Astronics

Comparing Astronics Corporation's CEO Compensation With the industry

Our data indicates that Astronics Corporation has a market capitalization of US$496m, and total annual CEO compensation was reported as US$2.8m for the year to December 2020. Notably, that's a decrease of 26% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$571k.

On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.1m. Accordingly, our analysis reveals that Astronics Corporation pays Peter Gundermann north of the industry median. Moreover, Peter Gundermann also holds US$12m worth of Astronics 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$571k	US$560k	21%
Other	US$2.2m	US$3.2m	79%
Total Compensation	US$2.8m	US$3.8m	100%

On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Astronics pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Astronics Corporation's Growth Numbers

Over the last three years, Astronics Corporation has shrunk its earnings per share by 78% per year. It saw its revenue drop 37% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Astronics Corporation Been A Good Investment?

The return of -47% over three years would not have pleased Astronics Corporation shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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 1 warning sign for Astronics that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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