Does GTT Communications, Inc.’s (NYSE:GTT) CEO Pay Reflect Performance?

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Rick Calder became the CEO of GTT Communications, Inc. (NYSE:GTT) 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for GTT Communications

How Does Rick Calder’s Compensation Compare With Similar Sized Companies?

According to our data, GTT Communications, Inc. has a market capitalization of US$1.0b, and pays its CEO total annual compensation worth US$9.2m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$575k. 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.

As you can see, Rick Calder is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean GTT Communications, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at GTT Communications, below.

NYSE:GTT CEO Compensation, July 2nd 2019
NYSE:GTT CEO Compensation, July 2nd 2019

Is GTT Communications, Inc. Growing?

GTT Communications, Inc. has reduced its earnings per share by an average of 111% a year, over the last three years (measured with a line of best fit). Its revenue is up 86% over last year.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

Has GTT Communications, Inc. Been A Good Investment?

With a total shareholder return of 4.6% over three years, GTT Communications, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We compared total CEO remuneration at GTT Communications, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. So you may want to check if insiders are buying GTT Communications shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 editorial-team@simplywallst.com. 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.