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Jim Kamsickas became the CEO of Dana Incorporated (NYSE:DAN) in 2015, 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 Dana pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Jim Kamsickas Compare With Other Companies In The Industry?
According to our data, Dana Incorporated has a market capitalization of US$1.9b, and paid its CEO total annual compensation worth US$8.6m over the year to December 2019. Notably, that's a decrease of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$8.3m. From this we gather that Jim Kamsickas is paid around the median for CEOs in the industry. Moreover, Jim Kamsickas also holds US$6.6m worth of Dana stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. In Dana's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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 Dana Incorporated's Growth Numbers
Over the last three years, Dana Incorporated has shrunk its earnings per share by 37% per year. In the last year, its revenue is up 2.6%.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Dana Incorporated Been A Good Investment?
Given the total shareholder loss of 42% over three years, many shareholders in Dana Incorporated are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Dana pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining earnings growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 4 warning signs for Dana that investors should look into moving forward.
Important note: Dana 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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