We Think Some Shareholders May Hesitate To Increase Iridium Communications Inc.'s (NASDAQ:IRDM) CEO Compensation

Key Insights

• Iridium Communications to hold its Annual General Meeting on 14th of May
• Total pay for CEO Matt Desch includes US$1.02m salary
• The overall pay is comparable to the industry average
• Over the past three years, Iridium Communications' EPS grew by 108% and over the past three years, the total loss to shareholders 21%

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The underwhelming share price performance of Iridium Communications Inc. (NASDAQ:IRDM) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 14th of May. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Iridium Communications

Comparing Iridium Communications Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Iridium Communications Inc. has a market capitalization of US$2.8b, and reported total annual CEO compensation of US$9.2m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

In comparison with other companies in the American Telecom industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$11m. From this we gather that Matt Desch is paid around the median for CEOs in the industry. Moreover, Matt Desch also holds US$24m worth of Iridium Communications stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.0m	US$981k	11%
Other	US$8.2m	US$8.0m	89%
Total Compensation	US$9.2m	US$9.0m	100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. Iridium Communications 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 Iridium Communications Inc.'s Growth Numbers

Iridium Communications Inc. has seen its earnings per share (EPS) increase by 108% a year over the past three years. In the last year, its revenue is up 6.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Iridium Communications Inc. Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in Iridium Communications Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Iridium Communications you should be aware of, and 1 of them is potentially serious.

Switching gears from Iridium Communications, 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.

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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.