Michael Saylor became the CEO of MicroStrategy Incorporated (NASDAQ:MSTR) in 1989. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for MicroStrategy
How Does Michael Saylor’s Compensation Compare With Similar Sized Companies?
According to our data, MicroStrategy Incorporated has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$656k. (This is based on the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.7m.
Most shareholders would consider it a positive that Michael Saylor takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at MicroStrategy has changed over time.
Is MicroStrategy Incorporated Growing?
MicroStrategy Incorporated has reduced its earnings per share by an average of 67% a year, over the last three years (measured with a line of best fit). Its revenue is down -1.2% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has MicroStrategy Incorporated Been A Good Investment?
With a three year total loss of 21%, MicroStrategy Incorporated would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
It looks like MicroStrategy Incorporated pays its CEO less than similar sized companies.
The compensation paid to Michael Saylor is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. So you may want to check if insiders are buying MicroStrategy shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.