Key Insights

• General Dynamics' Annual General Meeting to take place on 1st of May
• CEO Phebe Novakovic's total compensation includes salary of US$1.70m
• The overall pay is 50% above the industry average
• General Dynamics' total shareholder return over the past three years was 60% while its EPS grew by 3.7% over the past three years

Under the guidance of CEO Phebe Novakovic, General Dynamics Corporation (NYSE:GD) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 1st of May. However, some shareholders will still be cautious of paying the CEO excessively.

Comparing General Dynamics Corporation's CEO Compensation With The Industry

According to our data, General Dynamics Corporation has a market capitalization of US$78b, and paid its CEO total annual compensation worth US$23m over the year to December 2023. That's a fairly small increase of 5.1% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.7m.

On comparing similar companies in the American Aerospace & Defense industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. Accordingly, our analysis reveals that General Dynamics Corporation pays Phebe Novakovic north of the industry median. Moreover, Phebe Novakovic also holds US$243m worth of General Dynamics 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 23% of total compensation represents salary and 77% is other remuneration. General Dynamics pays a modest slice of remuneration through salary, as compared 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.

General Dynamics Corporation's Growth

General Dynamics Corporation has seen its earnings per share (EPS) increase by 3.7% a year over the past three years. Its revenue is up 8.1% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 General Dynamics Corporation Been A Good Investment?

Most shareholders would probably be pleased with General Dynamics Corporation for providing a total return of 60% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

Shareholders may want to check for free if General Dynamics insiders are buying or selling shares.

Important note: General Dynamics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.