Chuck Prow has been the CEO of Vectrus, Inc. (NYSE:VEC) since 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chuck Prow’s Compensation Compare With Similar Sized Companies?
Our data indicates that Vectrus, Inc. is worth US$478m, and total annual CEO compensation was reported as US$3.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$681k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.
It would therefore appear that Vectrus, Inc. pays Chuck Prow more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Vectrus has changed over time.
Is Vectrus, Inc. Growing?
On average over the last three years, Vectrus, Inc. has grown earnings per share (EPS) by 19% each year (using a line of best fit). Its revenue is up 7.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
Has Vectrus, Inc. Been A Good Investment?
I think that the total shareholder return of 51%, over three years, would leave most Vectrus, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Vectrus, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Vectrus insiders are buying or selling shares.
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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