Yahoo Finance The Compensation For Allison Transmission Holdings, Inc.'s (NYSE:ALSN) CEO Looks Deserved And Here's Why
Key Insights
Allison Transmission Holdings' Annual General Meeting to take place on 8th of May
Total pay for CEO Dave Graziosi includes US$1.04m salary
The overall pay is comparable to the industry average
Over the past three years, Allison Transmission Holdings' EPS grew by 46% and over the past three years, the total shareholder return was 83%
It would be hard to discount the role that CEO Dave Graziosi has played in delivering the impressive results at Allison Transmission Holdings, Inc. (NYSE:ALSN) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 8th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
View our latest analysis for Allison Transmission Holdings
How Does Total Compensation For Dave Graziosi Compare With Other Companies In The Industry?
According to our data, Allison Transmission Holdings, Inc. has a market capitalization of US$6.4b, and paid its CEO total annual compensation worth US$10m over the year to December 2023. We note that's an increase of 11% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
For comparison, other companies in the American Machinery industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.0m. This suggests that Allison Transmission Holdings remunerates its CEO largely in line with the industry average. What's more, Dave Graziosi holds US$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.0m | US$995k | 10% |
Other | US$9.3m | US$8.3m | 90% |
Total Compensation | US$10m | US$9.3m | 100% |
On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Allison Transmission Holdings allocates a smaller portion of compensation to salary 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.
A Look at Allison Transmission Holdings, Inc.'s Growth Numbers
Over the past three years, Allison Transmission Holdings, Inc. has seen its earnings per share (EPS) grow by 46% per year. It achieved revenue growth of 8.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Allison Transmission Holdings, Inc. Been A Good Investment?
We think that the total shareholder return of 83%, over three years, would leave most Allison Transmission Holdings, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Allison Transmission Holdings that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
