Yahoo Finance It Looks Like Gentherm Incorporated's (NASDAQ:THRM) CEO May Expect Their Salary To Be Put Under The Microscope
Key Insights
Gentherm's Annual General Meeting to take place on 16th of May
Total pay for CEO Phil Eyler includes US$959.5k salary
Total compensation is similar to the industry average
Gentherm's EPS declined by 15% over the past three years while total shareholder loss over the past three years was 28%
Shareholders will probably not be too impressed with the underwhelming results at Gentherm Incorporated (NASDAQ:THRM) recently. At the upcoming AGM on 16th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for Gentherm
How Does Total Compensation For Phil Eyler Compare With Other Companies In The Industry?
Our data indicates that Gentherm Incorporated has a market capitalization of US$1.6b, and total annual CEO compensation was reported as US$7.6m for the year to December 2023. Notably, that's an increase of 40% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$960k.
For comparison, other companies in the American Auto Components industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$6.7m. From this we gather that Phil Eyler is paid around the median for CEOs in the industry. What's more, Phil Eyler holds US$5.3m 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$960k | US$911k | 13% |
Other | US$6.6m | US$4.5m | 87% |
Total Compensation | US$7.6m | US$5.4m | 100% |
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Our data reveals that Gentherm allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Gentherm Incorporated's Growth Numbers
Over the last three years, Gentherm Incorporated has shrunk its earnings per share by 15% per year. Its revenue is up 12% over the last year.
Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Gentherm Incorporated Been A Good Investment?
Since shareholders would have lost about 28% over three years, some Gentherm Incorporated investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
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. That's why we did some digging and identified 1 warning sign for Gentherm that you should be aware of before investing.
Important note: Gentherm is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
