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Eric DeMarco became the CEO of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) in 2004. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Eric DeMarco’s Compensation Compare With Similar Sized Companies?
Our data indicates that Kratos Defense & Security Solutions, Inc. is worth US$1.8b, and total annual CEO compensation is US$3.6m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$760k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.5m.
That means Eric DeMarco receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Kratos Defense & Security Solutions has changed from year to year.
Is Kratos Defense & Security Solutions, Inc. Growing?
Kratos Defense & Security Solutions, Inc. has increased its earnings per share (EPS) by an average of 26% a year, over the last three years (using a line of best fit). It achieved revenue growth of 24% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Kratos Defense & Security Solutions, Inc. Been A Good Investment?
Boasting a total shareholder return of 424% over three years, Kratos Defense & Security Solutions, Inc. 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.
Eric DeMarco is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Kratos Defense & Security Solutions 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.
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 email@example.com.