How Is General Motors' (NYSE:GM) CEO Paid Relative To Peers?

Mary Barra became the CEO of General Motors Company (NYSE:GM) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether General Motors pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for General Motors

Comparing General Motors Company's CEO Compensation With the industry

According to our data, General Motors Company has a market capitalization of US$46b, and paid its CEO total annual compensation worth US$22m over the year to December 2019. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$2.1m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$2.1m. Accordingly, our analysis reveals that General Motors Company pays Mary Barra north of the industry median. Furthermore, Mary Barra directly owns US$42m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. General Motors sets aside a smaller share of compensation for salary, in comparison to the overall 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 General Motors Company's Growth Numbers

Over the last three years, General Motors Company has shrunk its earnings per share by 45% per year. Its revenue is down 20% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has General Motors Company Been A Good Investment?

Since shareholders would have lost about 6.1% over three years, some General Motors Company investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Mary is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for General Motors (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Important note: General Motors 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.

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. 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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