Ronald Tutor has been the CEO of Tutor Perini Corporation (NYSE:TPC) since 2000. 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.
How Does Ronald Tutor’s Compensation Compare With Similar Sized Companies?
Our data indicates that Tutor Perini Corporation is worth US$316m, and total annual CEO compensation was reported as US$23m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.8m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$2.3m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Tutor Perini. Talking in terms of the sector, salary represented approximately 20% of total compensation out of all the companies we analysed, while other remuneration made up 80% of the pie. Readers will want to know that Tutor Perini pays a modest slice of remuneration through salary, as compared to the wider sector.
It would therefore appear that Tutor Perini Corporation pays Ronald Tutor more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Tutor Perini has changed over time.
Is Tutor Perini Corporation Growing?
On average over the last three years, Tutor Perini Corporation has shrunk earnings per share by 90% each year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Tutor Perini Corporation Been A Good Investment?
Given the total loss of 78% over three years, many shareholders in Tutor Perini Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Tutor Perini Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Taking a breather from CEO compensation, we’ve spotted 2 warning signs for Tutor Perini (of which 1 shouldn’t be ignored!) you should know about in order to have a holistic understanding of the stock.
If you want to buy a stock that is better than Tutor Perini, this free list of high return, low debt companies is a great place to look.
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