John Chen became the CEO of BlackBerry Limited (TSE:BB) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 John Chen’s Compensation Compare With Similar Sized Companies?
Our data indicates that BlackBerry Limited is worth CA$6.8b, and total annual CEO compensation is US$3m. That’s actually a decrease on the year before. When we examined a selection of companies with market caps ranging from US$4.0b to US$12.0b, we found the median CEO compensation was US$4m.
So John Chen is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at BlackBerry has changed over time.
Is BlackBerry Limited Growing?
Over the last three years BlackBerry Limited has grown its earnings per share (EPS) by an average of 32% per year. In the last year, its revenue is down -16%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
Has BlackBerry Limited Been A Good Investment?
With a total shareholder return of 18% over three years, BlackBerry Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
John Chen is paid around what is normal the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So upon reflection one could argue that the CEO pay is quite reasonable. CEO pay isn’t the only data point that can tell us about management of a company. So it makes sense to check how long the Board of Directors has been in place.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.