Why We Think Dover Corporation's (NYSE:DOV) CEO Compensation Is Not Excessive At All

Key Insights

• Dover to hold its Annual General Meeting on 2nd of May
• Total pay for CEO Rich Tobin includes US$1.34m salary
• The total compensation is similar to the average for the industry
• Dover's EPS declined by 0.8% over the past three years while total shareholder return over the past three years was 32%

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Despite Dover Corporation's (NYSE:DOV) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 2nd of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Dover

Comparing Dover Corporation's CEO Compensation With The Industry

According to our data, Dover Corporation has a market capitalization of US$23b, and paid its CEO total annual compensation worth US$19m over the year to December 2024. We note that's an increase of 15% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

In comparison with other companies in the American Machinery industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$16m. So it looks like Dover compensates Rich Tobin in line with the median for the industry. Moreover, Rich Tobin also holds US$42m worth of Dover stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.3m	US$1.3m	7%
Other	US$18m	US$16m	93%
Total Compensation	US$19m	US$17m	100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. It's interesting to note that Dover allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Dover Corporation's Growth

Dover Corporation saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is up 3.2%.

The lack of EPS growth is certainly uninspiring. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Dover Corporation Been A Good Investment?

Dover Corporation has served shareholders reasonably well, with a total return of 32% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

So you may want to check if insiders are buying Dover shares with their own money (free access).

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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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.