Shareholders Will Probably Hold Off On Increasing Corning Incorporated's (NYSE:GLW) CEO Compensation For The Time Being

Key Insights

• Corning will host its Annual General Meeting on 2nd of May

• Salary of US$1.58m is part of CEO Wendell Weeks's total remuneration

• The overall pay is 41% above the industry average

• Over the past three years, Corning's EPS grew by 7.7% and over the past three years, the total loss to shareholders 24%

The underwhelming share price performance of Corning Incorporated (NYSE:GLW) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 2nd of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Corning

Comparing Corning Incorporated's CEO Compensation With The Industry

At the time of writing, our data shows that Corning Incorporated has a market capitalization of US$27b, and reported total annual CEO compensation of US$16m for the year to December 2023. That's a slight decrease of 3.4% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.6m.

For comparison, other companies in the American Electronic industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. This suggests that Wendell Weeks is paid more than the median for the industry. Furthermore, Wendell Weeks directly owns US$31m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 34% of total compensation out of all the companies we analyzed, while other remuneration made up 66% of the pie. In Corning's case, non-salary compensation represents a greater slice of total remuneration, 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.

Corning Incorporated's Growth

Corning Incorporated has seen its earnings per share (EPS) increase by 7.7% a year over the past three years. It saw its revenue drop 11% over the last year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Corning Incorporated Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Corning Incorporated investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Corning you should be aware of, and 1 of them is significant.

Switching gears from Corning, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.