Key Insights

• Tennant to hold its Annual General Meeting on 1st of May
• CEO Dave Huml's total compensation includes salary of US$873.8k
• The overall pay is comparable to the industry average
• Tennant's EPS grew by 46% over the past three years while total shareholder return over the past three years was 55%

The performance at Tennant Company (NYSE:TNC) has been quite strong recently and CEO Dave Huml has played a 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. Here is our take on why we think CEO compensation is not extravagant.

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. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued 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. So it looks like Tennant compensates Dave Huml in line with the median for the industry. Furthermore, Dave Huml directly owns US$7.3m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Our data reveals that Tennant allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked 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. It achieved revenue growth of 14% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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?

Most shareholders would probably be pleased with Tennant Company for providing a total return of 55% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Tennant we think you should know about.

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.