Steve Pickett became the CEO of RigNet, Inc. ( NASDAQ:RNET ) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
How Does Steve Pickett's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that RigNet, Inc. has a market cap of US$201m, and is paying total annual CEO compensation of US$1.5m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$485k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.0m.
It would therefore appear that RigNet, Inc. pays Steve Pickett more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at RigNet has changed from year to year.
Is RigNet, Inc. Growing?
On average over the last three years, RigNet, Inc. has shrunk earnings per share by 25% each year (measured with a line of best fit). Its revenue is up 17% over 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has RigNet, Inc. Been A Good Investment?
Since shareholders would have lost about 31% over three years, some RigNet, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by RigNet, 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.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling RigNet (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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