Key Insights

• Penske Automotive Group will host its Annual General Meeting on 9th of May
• Total pay for CEO Roger Penske includes US$1.60m salary
• The overall pay is 42% below the industry average
• Penske Automotive Group's EPS grew by 20% over the past three years while total shareholder return over the past three years was 75%

The impressive results at Penske Automotive Group, Inc. (NYSE:PAG) recently will be great news for shareholders. At the upcoming AGM on 9th of May, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Comparing Penske Automotive Group, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Penske Automotive Group, Inc. has a market capitalization of US$10b, and reported total annual CEO compensation of US$7.4m for the year to December 2023. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.

For comparison, other companies in the American Specialty Retail industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. In other words, Penske Automotive Group pays its CEO lower than the industry median. Moreover, Roger Penske also holds US$42m worth of Penske Automotive Group 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 17% of total compensation represents salary, while the remainder of 83% is other remuneration. Penske Automotive Group pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. 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 Penske Automotive Group, Inc.'s Growth Numbers

Penske Automotive Group, Inc. has seen its earnings per share (EPS) increase by 20% a year over the past three years. In the last year, its revenue is up 5.2%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Penske Automotive Group, Inc. Been A Good Investment?

Boasting a total shareholder return of 75% over three years, Penske Automotive Group, Inc. 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.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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. That's why we did some digging and identified 3 warning signs for Penske Automotive Group that investors should think about before committing capital to this stock.

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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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.