Yahoo Finance Crown Holdings, Inc.'s (NYSE:CCK) CEO Compensation Is Looking A Bit Stretched At The Moment
Key Insights
Crown Holdings to hold its Annual General Meeting on 2nd of May
Total pay for CEO Tim Donahue includes US$1.37m salary
Total compensation is 34% above industry average
Crown Holdings' EPS grew by 5.9% over the past three years while total shareholder loss over the past three years was 24%
In the past three years, the share price of Crown Holdings, Inc. (NYSE:CCK) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 2nd of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Crown Holdings
How Does Total Compensation For Tim Donahue Compare With Other Companies In The Industry?
Our data indicates that Crown Holdings, Inc. has a market capitalization of US$9.5b, and total annual CEO compensation was reported as US$12m for the year to December 2023. That's a notable increase of 28% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
On examining similar-sized companies in the American Packaging industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$8.9m. Hence, we can conclude that Tim Donahue is remunerated higher than the industry median. Furthermore, Tim Donahue directly owns US$51m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.4m | US$1.3m | 11% |
Other | US$11m | US$8.0m | 89% |
Total Compensation | US$12m | US$9.3m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. Crown Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Crown Holdings, Inc.'s Growth Numbers
Over the past three years, Crown Holdings, Inc. has seen its earnings per share (EPS) grow by 5.9% per year. Its revenue is down 7.2% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Crown Holdings, Inc. Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Crown Holdings, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Crown Holdings you should be aware of, and 1 of them is potentially serious.
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.
