Yahoo Finance How Much Is Standard Motor Products' (NYSE:SMP) CEO Getting Paid?
This article will reflect on the compensation paid to Eric Sills who has served as CEO of Standard Motor Products, Inc. (NYSE:SMP) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Standard Motor Products.
View our latest analysis for Standard Motor Products
Comparing Standard Motor Products, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Standard Motor Products, Inc. has a market capitalization of US$1.1b, and reported total annual CEO compensation of US$1.3m for the year to December 2019. That's a notable increase of 27% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$619k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.3m. Accordingly, Standard Motor Products pays its CEO under the industry median. Furthermore, Eric Sills directly owns US$8.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$619k | US$600k | 47% |
Other | US$705k | US$444k | 53% |
Total Compensation | US$1.3m | US$1.0m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. It's interesting to note that Standard Motor Products pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Standard Motor Products, Inc.'s Growth
Over the last three years, Standard Motor Products, Inc. has shrunk its earnings per share by 3.5% per year. It saw its revenue drop 7.2% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Standard Motor Products, Inc. Been A Good Investment?
Standard Motor Products, Inc. has generated a total shareholder return of 5.8% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
As we noted earlier, Standard Motor Products pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. We can't categorize CEO compensation as high, but shareholders might object to a raise at this stage, considering overall poor performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Standard Motor Products that investors should think about before committing capital to this stock.
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.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
