Here's Why Shareholders May Want To Be Cautious With Increasing AptarGroup, Inc.'s (NYSE:ATR) CEO Pay Packet

Key Insights

• AptarGroup to hold its Annual General Meeting on 1st of May
• CEO Stephan Tanda's total compensation includes salary of US$1.12m
• The total compensation is similar to the average for the industry
• AptarGroup's EPS grew by 9.0% over the past three years while total shareholder loss over the past three years was 3.6%

In the past three years, the share price of AptarGroup, Inc. (NYSE:ATR) has struggled to generate growth for its shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 1st of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for AptarGroup

How Does Total Compensation For Stephan Tanda Compare With Other Companies In The Industry?

Our data indicates that AptarGroup, Inc. has a market capitalization of US$9.3b, and total annual CEO compensation was reported as US$8.9m for the year to December 2023. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

On examining similar-sized companies in the American Packaging industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$8.9m. This suggests that AptarGroup remunerates its CEO largely in line with the industry average. Furthermore, Stephan Tanda directly owns US$23m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.1m	13%
Other	US$7.8m	US$7.7m	87%
Total Compensation	US$8.9m	US$8.8m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. There isn't a significant difference between AptarGroup and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at AptarGroup, Inc.'s Growth Numbers

AptarGroup, Inc. has seen its earnings per share (EPS) increase by 9.0% a year over the past three years. Its revenue is up 5.0% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has AptarGroup, Inc. Been A Good Investment?

Given the total shareholder loss of 3.6% over three years, many shareholders in AptarGroup, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for AptarGroup that investors should be aware of in a dynamic business environment.

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. 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.