Yahoo Finance Shareholders Will Probably Not Have Any Issues With Enpro Inc.'s (NYSE:NPO) CEO Compensation
Key Insights
Enpro to hold its Annual General Meeting on 2nd of May
Salary of US$830.8k is part of CEO Eric Vaillancourt's total remuneration
The total compensation is similar to the average for the industry
Enpro's EPS declined by 15% over the past three years while total shareholder return over the past three years was 77%
Despite strong share price growth of 77% for Enpro Inc. (NYSE:NPO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 2nd of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
View our latest analysis for Enpro
Comparing Enpro Inc.'s CEO Compensation With The Industry
According to our data, Enpro Inc. has a market capitalization of US$3.1b, and paid its CEO total annual compensation worth US$6.2m over the year to December 2023. That's a fairly small increase of 5.5% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$831k.
On examining similar-sized companies in the American Machinery industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.9m. This suggests that Enpro remunerates its CEO largely in line with the industry average. Moreover, Eric Vaillancourt also holds US$4.8m worth of Enpro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$831k | US$800k | 13% |
Other | US$5.4m | US$5.1m | 87% |
Total Compensation | US$6.2m | US$5.9m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. Enpro pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Enpro Inc.'s Growth
Over the last three years, Enpro Inc. has shrunk its earnings per share by 15% per year. Its revenue is down 3.6% over the previous year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Enpro Inc. Been A Good Investment?
Most shareholders would probably be pleased with Enpro Inc. for providing a total return of 77% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
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 2 warning signs for Enpro that investors should be aware of in a dynamic business environment.
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.
