Key Insights

• General Dynamics' Annual General Meeting to take place on 1st of May

• Salary of US$1.70m is part of CEO Phebe Novakovic's total remuneration

• The overall pay is 50% above the industry average

• General Dynamics' total shareholder return over the past three years was 62% while its EPS grew by 3.7% over the past three years

CEO Phebe Novakovic has done a decent job of delivering relatively good performance at General Dynamics Corporation (NYSE:GD) recently. As shareholders go into the upcoming AGM on 1st of May, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for General Dynamics

Comparing General Dynamics Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that General Dynamics Corporation has a market capitalization of US$80b, and reported total annual CEO compensation of US$23m for the year to December 2023. That's just a smallish increase of 5.1% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.7m.

For comparison, other companies in the American Aerospace & Defense industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. Hence, we can conclude that Phebe Novakovic is remunerated higher than the industry median. Moreover, Phebe Novakovic also holds US$240m worth of General Dynamics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. In General Dynamics' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at General Dynamics Corporation's Growth Numbers

General Dynamics Corporation's earnings per share (EPS) grew 3.7% per year over the last three years. It achieved revenue growth of 8.1% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 General Dynamics Corporation Been A Good Investment?

Most shareholders would probably be pleased with General Dynamics Corporation for providing a total return of 62% 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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.

So you may want to check if insiders are buying General Dynamics shares with their own money (free access).

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.