Is Booz Allen Hamilton Holding Corporation (NYSE:BAH) Overpaying Its CEO?

Horacio Rozanski has been the CEO of Booz Allen Hamilton Holding Corporation (NYSE:BAH) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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How Does Horacio Rozanski's Compensation Compare With Similar Sized Companies?

According to our data, Booz Allen Hamilton Holding Corporation has a market capitalization of US$6.9b, and pays its CEO total annual compensation worth US$4.9m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.5m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.4m.

So Horacio Rozanski is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Booz Allen Hamilton Holding, below.

Is Booz Allen Hamilton Holding Corporation Growing?

Over the last three years Booz Allen Hamilton Holding Corporation has grown its earnings per share (EPS) by an average of 9.2% per year (using a line of best fit). In the last year, its revenue is up 5.2%.

I'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Booz Allen Hamilton Holding Corporation Been A Good Investment?

Most shareholders would probably be pleased with Booz Allen Hamilton Holding Corporation for providing a total return of 84% over three years. 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.

In Summary...

Horacio Rozanski is paid around the same as most CEOs of similar size companies.

While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. So you may want to check if insiders are buying Booz Allen Hamilton Holding shares with their own money (free access).

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 editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.