This Is Why SPX Corporation's (NYSE:SPXC) CEO Compensation Looks Appropriate

Performance at SPX Corporation (NYSE:SPXC) has been reasonably good and CEO Gene Lowe has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 11 May 2021. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for SPX

Comparing SPX Corporation's CEO Compensation With the industry

At the time of writing, our data shows that SPX Corporation has a market capitalization of US$2.8b, and reported total annual CEO compensation of US$6.1m for the year to December 2020. That's a notable decrease of 20% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$918k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.4m. From this we gather that Gene Lowe is paid around the median for CEOs in the industry. What's more, Gene Lowe holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that SPX allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at SPX Corporation's Growth Numbers

SPX Corporation has seen its earnings per share (EPS) increase by 4.4% a year over the past three years. It achieved revenue growth of 2.5% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SPX Corporation Been A Good Investment?

Boasting a total shareholder return of 86% over three years, SPX Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 1 warning sign for SPX that investors should think about before committing capital to this stock.

Important note: SPX 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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