Here's Why Crane Co.'s (NYSE:CR) CEO Compensation Is The Least Of Shareholders' Concerns

By
Simply Wall St
Published
April 19, 2021
NYSE:CR

Performance at Crane Co. (NYSE:CR) has been reasonably good and CEO Max Mitchell has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 26 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Crane

Comparing Crane Co.'s CEO Compensation With the industry

According to our data, Crane Co. has a market capitalization of US$5.5b, and paid its CEO total annual compensation worth US$6.4m over the year to December 2020. Notably, that's a decrease of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$857k.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.2m. From this we gather that Max Mitchell is paid around the median for CEOs in the industry. Moreover, Max Mitchell also holds US$22m worth of Crane stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$857k US$1.0m 13%
Other US$5.5m US$6.2m 87%
Total CompensationUS$6.4m US$7.2m100%

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. Crane sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NYSE:CR CEO Compensation April 19th 2021

Crane Co.'s Growth

Crane Co.'s earnings per share (EPS) grew 2.4% per year over the last three years. Its revenue is down 11% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Crane Co. Been A Good Investment?

Crane Co. has not done too badly by shareholders, with a total return of 5.8%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Crane that investors should be aware of in a dynamic business environment.

Switching gears from Crane, 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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