Stock Analysis

Shareholders May Not Be So Generous With Oshkosh Corporation's (NYSE:OSK) CEO Compensation And Here's Why

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Key Insights

  • Oshkosh to hold its Annual General Meeting on 7th of May
  • Total pay for CEO John Pfeifer includes US$1.09m salary
  • The total compensation is similar to the average for the industry
  • Over the past three years, Oshkosh's EPS grew by 27% and over the past three years, the total loss to shareholders 7.6%

In the past three years, the share price of Oshkosh Corporation (NYSE:OSK) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 7th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Oshkosh

Comparing Oshkosh Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Oshkosh Corporation has a market capitalization of US$7.3b, and reported total annual CEO compensation of US$10m for the year to December 2023. We note that's an increase of 64% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On examining similar-sized companies in the American Machinery industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$8.5m. So it looks like Oshkosh compensates John Pfeifer in line with the median for the industry. What's more, John Pfeifer holds US$8.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20232022Proportion (2023)
Salary US$1.1m US$1.0m 10%
Other US$9.3m US$5.3m 90%
Total CompensationUS$10m US$6.4m100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. In Oshkosh's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NYSE:OSK CEO Compensation May 1st 2024

A Look at Oshkosh Corporation's Growth Numbers

Oshkosh Corporation has seen its earnings per share (EPS) increase by 27% a year over the past three years. In the last year, its revenue is up 15%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Oshkosh Corporation Been A Good Investment?

Since shareholders would have lost about 7.6% over three years, some Oshkosh Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Oshkosh (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Oshkosh is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Valuation is complex, but we're helping make it simple.

Find out whether Oshkosh is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.