Is iRobot Corporation’s (NASDAQ:IRBT) CEO Pay Justified?

Colin Angle became the CEO of iRobot Corporation (NASDAQ:IRBT) in 1997. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for iRobot

How Does Colin Angle’s Compensation Compare With Similar Sized Companies?

According to our data, iRobot Corporation has a market capitalization of US$3.6b, and pays its CEO total annual compensation worth US$6.0m. (This is based on the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$700k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$4.9m.

So Colin Angle receives a similar amount to the median CEO pay, amongst 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 a visual representation of the CEO compensation at iRobot, below.

NasdaqGS:IRBT CEO Compensation, April 21st 2019
NasdaqGS:IRBT CEO Compensation, April 21st 2019

Is iRobot Corporation Growing?

On average over the last three years, iRobot Corporation has grown earnings per share (EPS) by 22% each year (using a line of best fit). Its revenue is up 24% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has iRobot Corporation Been A Good Investment?

Boasting a total shareholder return of 264% over three years, iRobot Corporation 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.

In Summary…

Colin Angle 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. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at iRobot.

Important note: iRobot may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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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.