In 2016 Mike Cotoia was appointed CEO of TechTarget, Inc. (NASDAQ:TTGT). 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. 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.
How Does Mike Cotoia’s Compensation Compare With Similar Sized Companies?
Our data indicates that TechTarget, Inc. is worth US$684m, and total annual CEO compensation was reported as US$1.1m for the year to December 2018. 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$400m to US$1.6b, and the median CEO total compensation was US$2.7m.
A first glance this seems like a real positive for shareholders, since Mike Cotoia is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. It could be important to check this free visual depiction of what analysts expect for the future.
You can see a visual representation of the CEO compensation at TechTarget, below.
Is TechTarget, Inc. Growing?
On average over the last three years, TechTarget, Inc. has grown earnings per share (EPS) by 58% each year (using a line of best fit). Its revenue is up 8.3% over last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
Has TechTarget, Inc. Been A Good Investment?
I think that the total shareholder return of 205%, over three years, would leave most TechTarget, Inc. shareholders smiling. 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.
It appears that TechTarget, Inc. remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling TechTarget (free visualization of insider trades).
If you want to buy a stock that is better than TechTarget, this free list of high return, low debt companies is a great place to look.
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