This article will reflect on the compensation paid to Bracken Darrell who has served as CEO of Logitech International S.A. (VTX:LOGN) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Logitech International.
Comparing Logitech International S.A.'s CEO Compensation With the industry
At the time of writing, our data shows that Logitech International S.A. has a market capitalization of CHF12b, and reported total annual CEO compensation of US$8.0m for the year to March 2020. We note that's a small decrease of 4.2% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$925k.
On comparing similar companies in the industry with market capitalizations above CHF7.3b, we found that the median total CEO compensation was US$12m. Accordingly, Logitech International pays its CEO under the industry median. Furthermore, Bracken Darrell directly owns CHF57m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Logitech International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Logitech International S.A.'s Growth Numbers
Logitech International S.A. has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 28% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Logitech International S.A. Been A Good Investment?
Boasting a total shareholder return of 155% over three years, Logitech International S.A. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Logitech International pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Bracken's performance.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Logitech International that investors should think about before committing capital to this stock.
Switching gears from Logitech International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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