In 2016 Mike Cotoia was appointed CEO of TechTarget, Inc. (NASDAQ:TTGT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
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How Does Mike Cotoia’s Compensation Compare With Similar Sized Companies?
According to our data, TechTarget, Inc. has a market capitalization of US$552m, and pays its CEO total annual compensation worth US$1.1m. (This is based on 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$600k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.8m.
Most shareholders would consider it a positive that Mike Cotoia takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. 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 TechTarget, below.
Is TechTarget, Inc. Growing?
TechTarget, Inc. has increased its earnings per share (EPS) by an average of 54% a year, over the last three years (using a line of best fit). It achieved revenue growth of 10% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has TechTarget, Inc. Been A Good Investment?
Most shareholders would probably be pleased with TechTarget, Inc. for providing a total return of 152% over three years. 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.
It appears that TechTarget, Inc. remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Mike Cotoia deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling TechTarget shares (free trial).
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 firstname.lastname@example.org. 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.