In 2002 Carl Russo was appointed CEO of Calix, Inc. (NYSE:CALX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Carl Russo’s Compensation Compare With Similar Sized Companies?
Our data indicates that Calix, Inc. is worth US$383m, and total annual CEO compensation is US$1.9m. (This is based on the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$500k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.5m.
So Carl Russo is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Calix has changed from year to year.
Is Calix, Inc. Growing?
On average over the last three years, Calix, Inc. has shrunk earnings per share by 14% each year (measured with a line of best fit). It saw its revenue drop -14% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Calix, Inc. Been A Good Investment?
Calix, Inc. has generated a total shareholder return of 5.7% over three years, so most shareholders wouldn’t be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
Carl Russo is paid around the same as most CEOs of similar size companies.
We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We’re not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. Shareholders may want to check for free if Calix insiders are buying or selling shares.
Important note: Calix 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.