In 2017 Joe Cutillo was appointed CEO of Sterling Construction Company, Inc. (NASDAQ:STRL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Joe Cutillo’s Compensation Compare With Similar Sized Companies?
According to our data, Sterling Construction Company, Inc. has a market capitalization of US$373m, and paid its CEO total annual compensation worth US$8.3m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$632k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.
It would therefore appear that Sterling Construction Company, Inc. pays Joe Cutillo 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.
You can see a visual representation of the CEO compensation at Sterling Construction Company, below.
Is Sterling Construction Company, Inc. Growing?
Sterling Construction Company, Inc. has increased its earnings per share (EPS) by an average of 96% a year, over the last three years (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Sterling Construction Company, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Sterling Construction Company, Inc. for providing a total return of 50% over three years. 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 total CEO remuneration at Sterling Construction Company, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Sterling Construction Company shares with their own money (free access).
If you want to buy a stock that is better than Sterling Construction Company, this free list of high return, low debt companies is a great place to look.
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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