Is Titan Machinery Inc.’s (NASDAQ:TITN) CEO Pay Justified?

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The CEO of Titan Machinery Inc. (NASDAQ:TITN) is David Meyer. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Titan Machinery

How Does David Meyer’s Compensation Compare With Similar Sized Companies?

According to our data, Titan Machinery Inc. has a market capitalization of US$380m, and pays its CEO total annual compensation worth US$483k. (This number is for the twelve months until January 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$475k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.6m.

A first glance this seems like a real positive for shareholders, since David Meyer is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Titan Machinery, below.

NasdaqGS:TITN CEO Compensation, May 2nd 2019
NasdaqGS:TITN CEO Compensation, May 2nd 2019

Is Titan Machinery Inc. Growing?

Titan Machinery Inc. has increased its earnings per share (EPS) by an average of 94% a year, over the last three years (using a line of best fit). Its revenue is up 5.8% over 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 modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.

Has Titan Machinery Inc. Been A Good Investment?

I think that the total shareholder return of 39%, over three years, would leave most Titan Machinery Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

It appears that Titan Machinery Inc. remunerates its CEO below most similar sized companies. 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 David Meyer deserves a raise!

It’s not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Titan Machinery.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.