Is Manhattan Associates, Inc.'s (NASDAQ:MANH) CEO Pay Fair?

February 02, 2020

Eddie Capel became the CEO of Manhattan Associates, Inc. (NASDAQ:MANH) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Manhattan Associates

How Does Eddie Capel's Compensation Compare With Similar Sized Companies?

Our data indicates that Manhattan Associates, Inc. is worth US$5.5b, and total annual CEO compensation was reported as US$4.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$575k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.5m.

Most shareholders would consider it a positive that Eddie Capel takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Manhattan Associates has changed from year to year.

NasdaqGS:MANH CEO Compensation, February 3rd 2020

Is Manhattan Associates, Inc. Growing?

Manhattan Associates, Inc. has reduced its earnings per share by an average of 5.8% a year, over the last three years (measured with a line of best fit). Its revenue is up 9.0% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Manhattan Associates, Inc. Been A Good Investment?

I think that the total shareholder return of 74%, over three years, would leave most Manhattan Associates, Inc. shareholders smiling. 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.

In Summary...

It appears that Manhattan Associates, Inc. remunerates its CEO below most similar sized companies.

Eddie Capel is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. Although we could see higher EPS growth, we'd argue the remuneration is not an issue, based on these observations. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Manhattan Associates (free visualization of insider trades).

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.

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.

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. Thank you for reading.

mitchell_lawler

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