Phebe Novakovic became the CEO of General Dynamics Corporation (NYSE:GD) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Phebe Novakovic's Compensation Compare With Similar Sized Companies?
According to our data, General Dynamics Corporation has a market capitalization of US$54b, and paid its CEO total annual compensation worth US$21m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.6m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
It would therefore appear that General Dynamics Corporation pays Phebe Novakovic more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at General Dynamics, below.
Is General Dynamics Corporation Growing?
On average over the last three years, General Dynamics Corporation has grown earnings per share (EPS) by 11% each year (using a line of best fit). It achieved revenue growth of 8.7% over the last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has General Dynamics Corporation Been A Good Investment?
General Dynamics Corporation has not done too badly by shareholders, with a total return of 4.8%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount General Dynamics Corporation pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling General Dynamics (free visualization of insider trades).
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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