Is Curtiss-Wright Corporation (NYSE:CW) Overpaying Its CEO?
Dave Adams became the CEO of Curtiss-Wright Corporation (NYSE:CW) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Curtiss-Wright
How Does Dave Adams's Compensation Compare With Similar Sized Companies?
Our data indicates that Curtiss-Wright Corporation is worth US$3.9b, and total annual CEO compensation was reported as US$9.2m for the year to December 2019. That's a notable increase of 22% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$995k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.5m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Curtiss-Wright stands. On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Curtiss-Wright sets aside a smaller share of compensation for salary, in comparison to the overall industry.
Thus we can conclude that Dave Adams receives more in total compensation than the median of a group of companies in the same market, and of similar size to Curtiss-Wright Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at Curtiss-Wright has changed over time.
Is Curtiss-Wright Corporation Growing?
Over the last three years Curtiss-Wright Corporation has seen earnings per share (EPS) move in a positive direction by an average of 19% per year (using a line of best fit). In the last year, its revenue is up 3.2%.
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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Curtiss-Wright Corporation Been A Good Investment?
Curtiss-Wright Corporation has generated a total shareholder return of 5.9% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Curtiss-Wright Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Moving away from CEO compensation for the moment, we've identified 3 warning signs for Curtiss-Wright that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
