Key Insights

• Gen Digital to hold its Annual General Meeting on 10th of September
• Total pay for CEO Vincent Pilette includes US$950.0k salary
• The total compensation is similar to the average for the industry
• Over the past three years, Gen Digital's EPS fell by 7.2% and over the past three years, the total shareholder return was 2.8%

The anaemic share price growth at Gen Digital Inc. (NASDAQ:GEN) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 10th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Comparing Gen Digital Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Gen Digital Inc. has a market capitalization of US$16b, and reported total annual CEO compensation of US$15m for the year to March 2024. Notably, that's a decrease of 39% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$950k.

In comparison with other companies in the American Software industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$15m. This suggests that Gen Digital remunerates its CEO largely in line with the industry average. Moreover, Vincent Pilette also holds US$48m worth of Gen Digital stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. In Gen Digital'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.

Gen Digital Inc.'s Growth

Over the last three years, Gen Digital Inc. has shrunk its earnings per share by 7.2% per year. In the last year, its revenue is up 7.4%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Gen Digital Inc. Been A Good Investment?

Gen Digital Inc. has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The lacklustre share price returns along with the lack of earnings growth makes us think that a strong rebound in the share price may be difficult. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

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 5 warning signs for Gen Digital you should be aware of, and 1 of them is potentially serious.

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.