Yahoo Finance Increases to CEO Compensation Might Be Put On Hold For Now at Parker-Hannifin Corporation (NYSE:PH)
Under the guidance of CEO Tom Williams, Parker-Hannifin Corporation (NYSE:PH) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 October 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
See our latest analysis for Parker-Hannifin
How Does Total Compensation For Tom Williams Compare With Other Companies In The Industry?
According to our data, Parker-Hannifin Corporation has a market capitalization of US$39b, and paid its CEO total annual compensation worth US$17m over the year to June 2021. Notably, that's a decrease of 9.7% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.1m. Hence, we can conclude that Tom Williams is remunerated higher than the industry median. Furthermore, Tom Williams directly owns US$60m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | US$1.2m | US$1.2m | 7% |
Other | US$16m | US$18m | 93% |
Total Compensation | US$17m | US$19m | 100% |
On an industry level, roughly 20% of total compensation represents salary and 80% is other remuneration. It's interesting to note that Parker-Hannifin 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 Parker-Hannifin Corporation's Growth Numbers
Parker-Hannifin Corporation has seen its earnings per share (EPS) increase by 19% a year over the past three years. It achieved revenue growth of 4.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Parker-Hannifin Corporation Been A Good Investment?
Most shareholders would probably be pleased with Parker-Hannifin Corporation for providing a total return of 116% over three years. 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...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Parker-Hannifin that investors should look into moving forward.
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.
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.
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