Martin A. Van Heyningen became the CEO of KVH Industries, Inc. (NASDAQ:KVHI) in 1990, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for KVH Industries.
Comparing KVH Industries, Inc.’s CEO Compensation With the industry
At the time of writing, our data shows that KVH Industries, Inc. has a market capitalization of US$155m, and reported total annual CEO compensation of US$1.4m for the year to December 2019. That’s just a smallish increase of 7.5% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$523k.
On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$809k. Hence, we can conclude that Martin A. Van Heyningen is remunerated higher than the industry median. Moreover, Martin A. Van Heyningen also holds US$7.5m worth of KVH Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. It’s interesting to note that KVH Industries pays out a greater portion of remuneration through salary, compared to the industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
A Look at KVH Industries, Inc.’s Growth Numbers
Over the last three years, KVH Industries, Inc. has shrunk its earnings per share by 9.2% per year. In the last year, its revenue changed by just 0.1%.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has KVH Industries, Inc. Been A Good Investment?
With a three year total loss of 29% for the shareholders, KVH Industries, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Martin A. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn’t look good against shareholder returns, which have been negative for the past three years. Arguably worse, we’ve been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO’s compensation were to grow.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for KVH Industries that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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