Philip Mezey has been the CEO of Itron, Inc. ( NASDAQ:ITRI ) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Philip Mezey’s Compensation Compare With Similar Sized Companies?
Our data indicates that Itron, Inc. is worth US$1.9b, and total annual CEO compensation is US$5.9m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$800k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO compensation was US$3.6m.
Thus we can conclude that Philip Mezey receives more in total compensation than the median of a group of companies in the same market, and of similar size to Itron, Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Itron has changed over time.
Is Itron, Inc. Growing?
Itron, Inc. has reduced its earnings per share by an average of 58% a year, over the last three years. It achieved revenue growth of 19% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings .
Has Itron, Inc. Been A Good Investment?
I think that the total shareholder return of 72%, over three years, would leave most Itron, Inc. shareholders smiling. 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.
We compared the total CEO remuneration paid by Itron, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Itron shares (free trial).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org .