In 2003 Steve Trundle was appointed CEO of Alarm.com Holdings, Inc. (NASDAQ:ALRM). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Steve Trundle’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Alarm.com Holdings, Inc. has a market cap of US$2.1b, and reported total annual CEO compensation of US$1.9m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$210k. 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 looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.
Most shareholders would consider it a positive that Steve Trundle 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.
You can see a visual representation of the CEO compensation at Alarm.com Holdings, below.
Is Alarm.com Holdings, Inc. Growing?
Over the last three years Alarm.com Holdings, Inc. has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). It achieved revenue growth of 19% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Alarm.com Holdings, Inc. Been A Good Investment?
I think that the total shareholder return of 54%, over three years, would leave most Alarm.com Holdings, 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.
Alarm.com Holdings, Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Steve Trundle deserves a raise! It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Alarm.com Holdings shares (free trial).
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 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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