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In 2013 Tony Moraco was appointed CEO of Science Applications International Corporation ( NYSE:SAIC ). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tony Moraco’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Science Applications International Corporation has a market cap of US$4.1b, and is paying total annual CEO compensation of US$6.4m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.8m.
It would therefore appear that Science Applications International Corporation pays Tony Moraco 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Science Applications International, below.
Is Science Applications International Corporation Growing?
Over the last three years Science Applications International Corporation has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). Its revenue is up 5.8% over last year.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future .
Has Science Applications International Corporation Been A Good Investment?
I think that the total shareholder return of 78%, over three years, would leave most Science Applications International Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Science Applications International Corporation pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Science Applications International insiders are buying or selling shares.
If you want to buy a stock that is better than Science Applications International, this free list of high return, low debt companies is a great place to look.
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 .