How Much Did Strattec Security's (NASDAQ:STRT) CEO Pocket Last Year?

This article will reflect on the compensation paid to Frank Krejci who has served as CEO of Strattec Security Corporation (NASDAQ:STRT) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Strattec Security

Comparing Strattec Security Corporation's CEO Compensation With the industry

Our data indicates that Strattec Security Corporation has a market capitalization of US$180m, and total annual CEO compensation was reported as US$562k for the year to June 2020. We note that's a decrease of 13% compared to last year. Notably, the salary which is US$465.9k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$598k. From this we gather that Frank Krejci is paid around the median for CEOs in the industry. Furthermore, Frank Krejci directly owns US$2.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$466k

US$518k

83%

Other

US$96k

US$129k

17%

Total Compensation

US$562k

US$647k

100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Strattec Security pays out 83% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Strattec Security Corporation's Growth Numbers

Strattec Security Corporation has reduced its earnings per share by 62% a year over the last three years. Its revenue is down 20% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Strattec Security Corporation Been A Good Investment?

Strattec Security Corporation has generated a total shareholder return of 7.5% 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.

To Conclude...

As previously discussed, Frank is compensated close to the median for companies of its size, and which belong to the same industry. Strattec Security has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Strattec Security that you should be aware of before investing.

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.

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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