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In 2011 Mike Petters was appointed CEO of Huntington Ingalls Industries, Inc. (NYSE:HII). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Huntington Ingalls Industries
How Does Mike Petters's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Huntington Ingalls Industries, Inc. has a market cap of US$9.1b, and is paying total annual CEO compensation of US$5.6m. (This figure is for the year to December 2018). That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
So Mike Petters is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Huntington Ingalls Industries has changed over time.
Is Huntington Ingalls Industries, Inc. Growing?
Huntington Ingalls Industries, Inc. has increased its earnings per share (EPS) by an average of 23% a year, over the last three years (using a line of best fit). It achieved revenue growth of 10% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Huntington Ingalls Industries, Inc. Been A Good Investment?
I think that the total shareholder return of 42%, over three years, would leave most Huntington Ingalls Industries, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Remuneration for Mike Petters is close enough to the median pay for a CEO of a similar sized company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Huntington Ingalls Industries shares with their own money (free access).
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.
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.