Shareholders May Be Wary Of Increasing Park-Ohio Holdings Corp.'s (NASDAQ:PKOH) CEO Compensation Package

Park-Ohio Holdings Corp. (NASDAQ:PKOH) has not performed well recently and CEO Matthew Crawford will probably need to up their game. At the upcoming AGM on 27 May 2021, shareholders can hear from the board including their plans for turning around performance. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Park-Ohio Holdings

How Does Total Compensation For Matthew Crawford Compare With Other Companies In The Industry?

According to our data, Park-Ohio Holdings Corp. has a market capitalization of US$429m, and paid its CEO total annual compensation worth US$5.2m over the year to December 2020. Notably, that's a decrease of 21% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$438k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.3m. Hence, we can conclude that Matthew Crawford is remunerated higher than the industry median. What's more, Matthew Crawford holds US$98m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that Park-Ohio Holdings allocates a smaller portion of compensation to salary 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.

Park-Ohio Holdings Corp.'s Growth

Park-Ohio Holdings Corp. has reduced its earnings per share by 57% a year over the last three years. It saw its revenue drop 18% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Park-Ohio Holdings Corp. Been A Good Investment?

Given the total shareholder loss of 7.4% over three years, many shareholders in Park-Ohio Holdings Corp. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. That's why we did our research, and identified 3 warning signs for Park-Ohio Holdings (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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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