We Think Shareholders May Want To Consider A Review Of CommScope Holding Company, Inc.'s (NASDAQ:COMM) CEO Compensation Package

Key Insights

• CommScope Holding Company to hold its Annual General Meeting on 9th of May
• CEO Chuck Treadway's total compensation includes salary of US$1.30m
• The total compensation is 283% higher than the average for the industry
• Over the past three years, CommScope Holding Company's EPS fell by 43% and over the past three years, the total loss to shareholders 94%

CommScope Holding Company, Inc. (NASDAQ:COMM) has not performed well recently and CEO Chuck Treadway will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 9th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for CommScope Holding Company

How Does Total Compensation For Chuck Treadway Compare With Other Companies In The Industry?

At the time of writing, our data shows that CommScope Holding Company, Inc. has a market capitalization of US$184m, and reported total annual CEO compensation of US$12m for the year to December 2023. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

On examining similar-sized companies in the American Communications industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$3.2m. This suggests that Chuck Treadway is paid more than the median for the industry. What's more, Chuck Treadway holds US$1.1m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.1m	11%
Other	US$11m	US$9.5m	89%
Total Compensation	US$12m	US$11m	100%

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. CommScope Holding Company pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at CommScope Holding Company, Inc.'s Growth Numbers

CommScope Holding Company, Inc. has reduced its earnings per share by 43% a year over the last three years. Its revenue is down 23% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has CommScope Holding Company, Inc. Been A Good Investment?

Few CommScope Holding Company, Inc. shareholders would feel satisfied with the return of -94% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for CommScope Holding Company (2 are a bit concerning!) that you should be aware of before investing here.

Switching gears from CommScope Holding Company, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.