Stock Analysis

We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Dover Corporation's (NYSE:DOV) CEO For Now

  •  Updated
NYSE:DOV
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CEO Rich Tobin has done a decent job of delivering relatively good performance at Dover Corporation (NYSE:DOV) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 07 May 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Dover

How Does Total Compensation For Rich Tobin Compare With Other Companies In The Industry?

Our data indicates that Dover Corporation has a market capitalization of US$21b, and total annual CEO compensation was reported as US$12m for the year to December 2020. We note that's an increase of 31% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$8.9m. Accordingly, our analysis reveals that Dover Corporation pays Rich Tobin north of the industry median. What's more, Rich Tobin holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$1.2m US$1.2m 10%
Other US$11m US$7.9m 90%
Total CompensationUS$12m US$9.1m100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. In Dover's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

ceo-compensation
NYSE:DOV CEO Compensation April 30th 2021

A Look at Dover Corporation's Growth Numbers

Dover Corporation has seen its earnings per share (EPS) increase by 4.5% a year over the past three years. In the last year, its revenue is down 2.4%.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Dover Corporation Been A Good Investment?

We think that the total shareholder return of 118%, over three years, would leave most Dover Corporation shareholders smiling. 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...

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. 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. We did our research and spotted 2 warning signs for Dover that investors should look into moving forward.

Switching gears from Dover, 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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