Jason Rhode became the CEO of Cirrus Logic, Inc. (NASDAQ:CRUS) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jason Rhode’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Cirrus Logic, Inc. has a market cap of US$3.2b, and is paying total annual CEO compensation of US$4.9m. (This is based on the year to March 2019). That’s less than last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$800k. 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$5.1m.
So Jason Rhode is paid around the average of 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.
The graphic below shows how CEO compensation at Cirrus Logic has changed from year to year.
Is Cirrus Logic, Inc. Growing?
On average over the last three years, Cirrus Logic, Inc. has shrunk earnings per share by 24% each year (measured with a line of best fit). It saw its revenue drop -20% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Cirrus Logic, Inc. Been A Good Investment?
With a total shareholder return of 6.7% over three years, Cirrus Logic, Inc. has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Jason Rhode is paid around what is normal the leaders of comparable size companies.
The company isn’t growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Cirrus Logic.
Important note: Cirrus Logic 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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