Does Charter Communications' (NASDAQ:CHTR) CEO Salary Compare Well With Industry Peers?

Simply Wall St
November 03, 2020

This article will reflect on the compensation paid to Tom Rutledge who has served as CEO of Charter Communications, Inc. (NASDAQ:CHTR) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Charter Communications.

See our latest analysis for Charter Communications

How Does Total Compensation For Tom Rutledge Compare With Other Companies In The Industry?

Our data indicates that Charter Communications, Inc. has a market capitalization of US$137b, and total annual CEO compensation was reported as US$8.7m for the year to December 2019. That's a fairly small increase of 7.2% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$2.0m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. Accordingly, Charter Communications pays its CEO under the industry median. Furthermore, Tom Rutledge directly owns US$148m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary US$2.0m US$2.0m 23%
Other US$6.7m US$6.2m 77%
Total CompensationUS$8.7m US$8.2m100%

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Our data reveals that Charter Communications allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NasdaqGS:CHTR CEO Compensation November 3rd 2020

Charter Communications, Inc.'s Growth

Charter Communications, Inc. has seen its earnings per share (EPS) increase by 63% a year over the past three years. It achieved revenue growth of 4.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Charter Communications, Inc. Been A Good Investment?

Boasting a total shareholder return of 72% over three years, Charter Communications, Inc. has done well by shareholders. 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...

As we touched on above, Charter Communications, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Considering robust EPS growth, we believe Tom to be modestly paid. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Charter Communications we think you should know about.

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

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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