Does Echo Global Logistics Inc’s (NASDAQ:ECHO) CEO Pay Matter?

Doug Waggoner has been the CEO of Echo Global Logistics Inc (NASDAQ:ECHO) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Echo Global Logistics

How Does Doug Waggoner’s Compensation Compare With Similar Sized Companies?

According to our data, Echo Global Logistics Inc has a market capitalization of US$729m, and pays its CEO total annual compensation worth US$4.3m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$798k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.2m.

Thus we can conclude that Doug Waggoner receives more in total compensation than the median of a group of companies in the same market, and of similar size to Echo Global Logistics Inc. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. So this free report on the analyst consensus forecasts could help you make a master move on this stock.

You can see a visual representation of the CEO compensation at Echo Global Logistics, below.

NasdaqGS:ECHO CEO Compensation November 30th 18
NasdaqGS:ECHO CEO Compensation November 30th 18

Is Echo Global Logistics Inc Growing?

Echo Global Logistics Inc has increased its earnings per share (EPS) by an average of 60% a year, over the last three years It achieved revenue growth of 33% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Has Echo Global Logistics Inc Been A Good Investment?

Echo Global Logistics Inc has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Echo Global Logistics Inc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Echo Global Logistics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.