Should You Worry About Echo Global Logistics, Inc.’s (NASDAQ:ECHO) CEO Pay Cheque?

In 2006 Doug Waggoner was appointed CEO of Echo Global Logistics, Inc. (NASDAQ:ECHO). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Echo Global Logistics

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

At the time of writing our data says that Echo Global Logistics, Inc. has a market cap of US$670m, and is paying total annual CEO compensation of US$4.3m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$798k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and 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. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Echo Global Logistics has changed from year to year.

NasdaqGS:ECHO CEO Compensation, March 3rd 2019
NasdaqGS:ECHO CEO Compensation, March 3rd 2019

Is Echo Global Logistics, Inc. Growing?

Over the last three years Echo Global Logistics, Inc. has grown its earnings per share (EPS) by an average of 76% per year (using a line of best fit). In the last year, its revenue is up 26%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Echo Global Logistics, Inc. Been A Good Investment?

With a three year total loss of 7.7%, Echo Global Logistics, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Echo Global Logistics, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Echo Global Logistics.

Important note: Echo Global Logistics 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.