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Rick Calder has been the CEO of GTT Communications, Inc. (NYSE:GTT) since 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rick Calder’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that GTT Communications, Inc. has a market cap of US$1.5b, and is paying total annual CEO compensation of US$8.2m. (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$525k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.4m.
Thus we can conclude that Rick Calder receives more in total compensation than the median of a group of companies in the same market, and of similar size to GTT Communications, 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.
The graphic below shows how CEO compensation at GTT Communications has changed from year to year.
Is GTT Communications, Inc. Growing?
On average over the last three years, GTT Communications, Inc. has shrunk earnings per share by 120% each year (measured with a line of best fit). Its revenue is up 78% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Shareholders might be interested in this free visualization of analyst forecasts.
Has GTT Communications, Inc. Been A Good Investment?
Boasting a total shareholder return of 99% over three years, GTT Communications, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by GTT Communications, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling GTT Communications (free visualization of insider trades).
Important note: GTT Communications 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.
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 email@example.com.