Shareholders Will Probably Hold Off On Increasing Allison Transmission Holdings, Inc.'s (NYSE:ALSN) CEO Compensation For The Time Being

Key Insights

• Allison Transmission Holdings to hold its Annual General Meeting on 7th of May
• CEO Dave Graziosi's total compensation includes salary of US$1.07m
• The total compensation is 37% higher than the average for the industry
• Allison Transmission Holdings' total shareholder return over the past three years was 144% while its EPS grew by 28% over the past three years

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

CEO Dave Graziosi has done a decent job of delivering relatively good performance at Allison Transmission Holdings, Inc. (NYSE:ALSN) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 7th of May. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Allison Transmission Holdings

How Does Total Compensation For Dave Graziosi Compare With Other Companies In The Industry?

Our data indicates that Allison Transmission Holdings, Inc. has a market capitalization of US$7.9b, and total annual CEO compensation was reported as US$12m for the year to December 2024. That's a notable increase of 19% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On examining similar-sized companies in the American Machinery industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$9.0m. Accordingly, our analysis reveals that Allison Transmission Holdings, Inc. pays Dave Graziosi north of the industry median. What's more, Dave Graziosi holds US$22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Allison Transmission Holdings pays a modest slice of remuneration through salary, as compared to the broader 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 Allison Transmission Holdings, Inc.'s Growth Numbers

Allison Transmission Holdings, Inc. has seen its earnings per share (EPS) increase by 28% a year over the past three years. Its revenue is up 6.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. 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 Allison Transmission Holdings, Inc. Been A Good Investment?

Boasting a total shareholder return of 144% over three years, Allison Transmission Holdings, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Allison Transmission Holdings that you should be aware of before investing.

Important note: Allison Transmission 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.