Key Insights

• Dorman Products will host its Annual General Meeting on 17th of May

• Salary of US$884.5k is part of CEO Kevin Olsen's total remuneration

• The total compensation is 32% less than the average for the industry

• Dorman Products' EPS grew by 12% over the past three years while total shareholder loss over the past three years was 11%

The performance at Dorman Products, Inc. (NASDAQ:DORM) has been rather lacklustre of late and shareholders may be wondering what CEO Kevin Olsen is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 17th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Dorman Products

How Does Total Compensation For Kevin Olsen Compare With Other Companies In The Industry?

Our data indicates that Dorman Products, Inc. has a market capitalization of US$2.9b, and total annual CEO compensation was reported as US$4.2m for the year to December 2023. We note that's an increase of 37% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$885k.

For comparison, other companies in the American Auto Components industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.2m. That is to say, Kevin Olsen is paid under the industry median. What's more, Kevin Olsen holds US$2.9m 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 13% of total compensation represents salary, while the remainder of 87% is other remuneration. It's interesting to note that Dorman Products pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Dorman Products, Inc.'s Growth

Over the past three years, Dorman Products, Inc. has seen its earnings per share (EPS) grow by 12% per year. It achieved revenue growth of 7.5% 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 modest revenue growth, suggesting the underlying business is healthy. 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 Dorman Products, Inc. Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Dorman Products, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The lacklustre share price returns is rather divergent to the robust growth in EPS, suggesting that there may be other factors weighing on it apart from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their 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 1 warning sign for Dorman Products that investors should think about before committing capital to this stock.

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.