Julie Howard has been the CEO of Navigant Consulting, Inc. (NYSE:NCI) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Julie Howard’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Navigant Consulting, Inc. has a market cap of US$938m, and is paying total annual CEO compensation of US$9.7m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$900k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.7m.
It would therefore appear that Navigant Consulting, Inc. pays Julie Howard 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Navigant Consulting has changed from year to year.
Is Navigant Consulting, Inc. Growing?
Navigant Consulting, Inc. has reduced its earnings per share by an average of 5.2% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 8.5%.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Navigant Consulting, Inc. Been A Good Investment?
With a total shareholder return of 20% over three years, Navigant Consulting, Inc. shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Navigant Consulting, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Navigant Consulting shares (free trial).
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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