Ted Fernandez became the CEO of The Hackett Group, Inc. (NASDAQ:HCKT) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
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How Does Ted Fernandez’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Hackett Group, Inc. is worth US$477m, and total annual CEO compensation is US$2.7m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$750k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.6m.
Thus we can conclude that Ted Fernandez receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Hackett Group, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Hackett Group has changed over time.
Is The Hackett Group, Inc. Growing?
Over the last three years The Hackett Group, Inc. has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). It achieved revenue growth of 3.1% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions.
You might want to check this free visual report on analyst forecasts for future earnings.
Has The Hackett Group, Inc. Been A Good Investment?
The Hackett Group, Inc. has served shareholders reasonably well, with a total return of 26% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at The Hackett Group, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hackett Group.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.