It would be hard to discount the role that CEO Gene Hall has played in delivering the impressive results at Gartner, Inc. (NYSE:IT) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 03 June 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
How Does Total Compensation For Gene Hall Compare With Other Companies In The Industry?
Our data indicates that Gartner, Inc. has a market capitalization of US$20b, and total annual CEO compensation was reported as US$13m for the year to December 2020. That's a modest increase of 5.3% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$908k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. This suggests that Gartner remunerates its CEO largely in line with the industry average. Furthermore, Gene Hall directly owns US$267m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. Gartner pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Gartner, Inc.'s Growth Numbers
Gartner, Inc. has seen its earnings per share (EPS) increase by 47% a year over the past three years. Its revenue is down 2.5% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Gartner, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Gartner, Inc. for providing a total return of 76% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Gartner that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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