Carl Russo became the CEO of Calix, Inc. (NYSE:CALX) in 2002. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Calix
How Does Carl Russo’s Compensation Compare With Similar Sized Companies?
According to our data, Calix, Inc. has a market capitalization of US$429m, and paid its CEO total annual compensation worth US$875k over the year to December 2019. We note that’s an increase of 75% above last year. While we always look at total compensation first, we note that the salary component is less, at US$500k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$2.1m.
Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 27% of total compensation represents salary, while the remainder of 73% is other remuneration. It’s interesting to note that Calix pays out a greater portion of remuneration through salary, in comparison to the wider industry.
At first glance this seems like a real positive for shareholders, since Carl Russo is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Calix has changed from year to year.
Is Calix, Inc. Growing?
Over the last three years Calix, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 41% per year (using a line of best fit). In the last year, its revenue is down 3.9%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Calix, Inc. Been A Good Investment?
Calix, Inc. has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
It looks like Calix, Inc. pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Carl Russo is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. Shifting gears from CEO pay for a second, we’ve spotted 4 warning signs for Calix you should be aware of, and 1 of them can’t be ignored.
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.
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