Stock Analysis
In 2014, Max Mitchell was appointed CEO of Crane Co. (NYSE:CR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Crane
How Does Max Mitchell's Compensation Compare With Similar Sized Companies?
Our data indicates that Crane Co. is worth US$3.0b, and total annual CEO compensation was reported as US$7.2m for the year to December 2019. We note that's an increase of 10% above last year. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Crane stands. Speaking on an industry level, we can see that nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Crane does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
That means Max Mitchell receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Crane has changed over time.
Is Crane Co. Growing?
On average over the last three years, Crane Co. has seen earnings per share (EPS) move in a favourable direction by 30% each year (using a line of best fit). Its revenue is down 1.9% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Crane Co. Been A Good Investment?
With a three year total loss of 33%, Crane Co. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Max Mitchell is paid around what is normal for the leaders of comparable size companies.
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Looking into other areas, we've picked out 4 warning signs for Crane that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
