Key Insights

• Tennant will host its Annual General Meeting on 1st of May

• Salary of US$873.8k is part of CEO Dave Huml's total remuneration

• The overall pay is comparable to the industry average

• Tennant's total shareholder return over the past three years was 55% while its EPS grew by 46% over the past three years

We have been pretty impressed with the performance at Tennant Company (NYSE:TNC) recently and CEO Dave Huml deserves a mention for their role in it. Coming up to the next AGM on 1st of May, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Tennant

Comparing Tennant Company's CEO Compensation With The Industry

Our data indicates that Tennant Company has a market capitalization of US$2.3b, and total annual CEO compensation was reported as US$5.5m for the year to December 2023. Notably, that's an increase of 34% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$874k.

In comparison with other companies in the American Machinery industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.7m. This suggests that Tennant remunerates its CEO largely in line with the industry average. What's more, Dave Huml holds US$7.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. Although there is a difference in how total compensation is set, Tennant more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Tennant Company's Growth Numbers

Tennant Company has seen its earnings per share (EPS) increase by 46% a year over the past three years. Its revenue is up 14% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Tennant Company Been A Good Investment?

We think that the total shareholder return of 55%, over three years, would leave most Tennant Company shareholders smiling. 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.

To Conclude...

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 an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for Tennant you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.