What Can We Make Of Dover's (NYSE:DOV) CEO Compensation?

By
Simply Wall St
Published
November 02, 2020
NYSE:DOV

Rich Tobin has been the CEO of Dover Corporation (NYSE:DOV) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Dover

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

At the time of writing, our data shows that Dover Corporation has a market capitalization of US$16b, and reported total annual CEO compensation of US$9.1m for the year to December 2019. We note that's a decrease of 67% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$8.3m. So it looks like Dover compensates Rich Tobin in line with the median for the industry. What's more, Rich Tobin holds US$7.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20192018Proportion (2019)
Salary US$1.2m US$777k 13%
Other US$7.9m US$27m 87%
Total CompensationUS$9.1m US$28m100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Dover sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:DOV CEO Compensation November 2nd 2020

Dover Corporation's Growth

Over the past three years, Dover Corporation has seen its earnings per share (EPS) grow by 5.3% per year. Its revenue is down 6.8% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dover Corporation Been A Good Investment?

We think that the total shareholder return of 53%, 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.

In Summary...

As we noted earlier, Dover pays its CEO in line with similar-sized companies belonging to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. Meanwhile, shareholder returns have remained positive over the same time frame. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Dover that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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