Greg Brown became the CEO of Motorola Solutions, Inc. (NYSE:MSI) in 2011. This analysis aims first to contrast CEO compensation with other large 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Greg Brown’s Compensation Compare With Similar Sized Companies?
According to our data, Motorola Solutions, Inc. has a market capitalization of US$30b, and paid its CEO total annual compensation worth US$20m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
Thus we can conclude that Greg Brown receives more in total compensation than the median of a group of large companies in the same market as Motorola Solutions, Inc.. However, this doesn’t necessarily mean the pay 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, below, how CEO compensation at Motorola Solutions has changed over time.
Is Motorola Solutions, Inc. Growing?
Over the last three years Motorola Solutions, Inc. has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). Its revenue is up 10% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Motorola Solutions, Inc. Been A Good Investment?
Boasting a total shareholder return of 128% over three years, Motorola Solutions, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Motorola Solutions, Inc., and compared it to remuneration at a group of other large companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Motorola Solutions 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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