Is NetScout Systems, Inc.'s (NASDAQ:NTCT) CEO Paid Enough Relative To Peers?

Anil Singhal became the CEO of NetScout Systems, Inc. (NASDAQ:NTCT) in 1984. 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 method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for NetScout Systems

How Does Anil Singhal's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that NetScout Systems, Inc. has a market cap of US$1.9b, and reported total annual CEO compensation of US$2.7m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at US$500k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.8m.

That means Anil Singhal receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at NetScout Systems has changed from year to year.

Is NetScout Systems, Inc. Growing?

On average over the last three years, NetScout Systems, Inc. has shrunk earnings per share by 52% each year (measured with a line of best fit). In the last year, its revenue is down 5.3%.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has NetScout Systems, Inc. Been A Good Investment?

Given the total loss of 22% over three years, many shareholders in NetScout Systems, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Anil Singhal is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NetScout Systems (free visualization of insider trades).

Important note: NetScout Systems 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.

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.

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