Stock Analysis

Increases to CEO Compensation Might Be Put On Hold For Now at EnerSys (NYSE:ENS)

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NYSE:ENS
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Under the guidance of CEO Dave Shaffer, EnerSys (NYSE:ENS) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 05 August 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for EnerSys

Comparing EnerSys' CEO Compensation With the industry

At the time of writing, our data shows that EnerSys has a market capitalization of US$4.2b, and reported total annual CEO compensation of US$7.0m for the year to March 2021. That's a notable increase of 34% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$970k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$3.8m. Hence, we can conclude that Dave Shaffer is remunerated higher than the industry median. What's more, Dave Shaffer holds US$23m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary US$970k US$940k 14%
Other US$6.0m US$4.3m 86%
Total CompensationUS$7.0m US$5.2m100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. EnerSys sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:ENS CEO Compensation July 30th 2021

EnerSys' Growth

EnerSys's earnings per share (EPS) grew 6.3% per year over the last three years. Its revenue is down 3.6% 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. 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. 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 EnerSys Been A Good Investment?

EnerSys has served shareholders reasonably well, with a total return of 25% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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've identified 1 warning sign for EnerSys that investors should be aware of in a dynamic business environment.

Switching gears from EnerSys, 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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