The Compensation For ITT Inc.'s (NYSE:ITT) CEO Looks Deserved And Here's Why

Key Insights

• ITT's Annual General Meeting to take place on 15th of May

• Salary of US$1.09m is part of CEO Luca Savi's total remuneration

• The overall pay is comparable to the industry average

• ITT's EPS grew by 84% over the past three years while total shareholder return over the past three years was 51%

We have been pretty impressed with the performance at ITT Inc. (NYSE:ITT) recently and CEO Luca Savi deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 15th of May. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for ITT

How Does Total Compensation For Luca Savi Compare With Other Companies In The Industry?

Our data indicates that ITT Inc. has a market capitalization of US$11b, and total annual CEO compensation was reported as US$9.3m for the year to December 2023. We note that's an increase of 36% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

For comparison, other companies in the American Machinery industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. From this we gather that Luca Savi is paid around the median for CEOs in the industry. Moreover, Luca Savi also holds US$22m worth of ITT stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. In ITT's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ITT Inc.'s Growth

ITT Inc. has seen its earnings per share (EPS) increase by 84% a year over the past three years. Its revenue is up 11% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 ITT Inc. Been A Good Investment?

Boasting a total shareholder return of 51% over three years, ITT Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ITT (free visualization of insider trades).

Important note: ITT 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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.