Yahoo Finance Shareholders Will Probably Hold Off On Increasing Littelfuse, Inc.'s (NASDAQ:LFUS) CEO Compensation For The Time Being
Key Insights
Littelfuse to hold its Annual General Meeting on 25th of April
Total pay for CEO Dave Heinzmann includes US$997.7k salary
The total compensation is similar to the average for the industry
Over the past three years, Littelfuse's EPS grew by 25% and over the past three years, the total loss to shareholders 13%
As many shareholders of Littelfuse, Inc. (NASDAQ:LFUS) will be aware, they have not made a gain on their investment in the past three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 25th of April. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for Littelfuse
How Does Total Compensation For Dave Heinzmann Compare With Other Companies In The Industry?
At the time of writing, our data shows that Littelfuse, Inc. has a market capitalization of US$5.6b, and reported total annual CEO compensation of US$6.6m for the year to December 2023. That's slightly lower by 4.2% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$998k.
For comparison, other companies in the American Electronic industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.3m. This suggests that Littelfuse remunerates its CEO largely in line with the industry average. What's more, Dave Heinzmann holds US$7.8m 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$998k | US$953k | 15% |
Other | US$5.6m | US$6.0m | 85% |
Total Compensation | US$6.6m | US$6.9m | 100% |
Speaking on an industry level, nearly 34% of total compensation represents salary, while the remainder of 66% is other remuneration. Littelfuse pays a modest slice of remuneration through salary, as compared 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.
Littelfuse, Inc.'s Growth
Littelfuse, Inc. has seen its earnings per share (EPS) increase by 25% a year over the past three years. In the last year, its revenue is down 6.0%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Littelfuse, Inc. Been A Good Investment?
Since shareholders would have lost about 13% over three years, some Littelfuse, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Littelfuse that investors should be aware of in a dynamic business environment.
Important note: Littelfuse 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.
