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Is Aspen Technology, Inc.'s (NASDAQ:AZPN) CEO Pay Justified?

Simply Wall St

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In 2013 Antonio Pietri was appointed CEO of Aspen Technology, Inc. (NASDAQ:AZPN). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Aspen Technology

How Does Antonio Pietri's Compensation Compare With Similar Sized Companies?

Our data indicates that Aspen Technology, Inc. is worth US$8.4b, and total annual CEO compensation is US$6.3m. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at US$600k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.

That means Antonio Pietri receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Aspen Technology, below.

NasdaqGS:AZPN CEO Compensation, June 6th 2019

Is Aspen Technology, Inc. Growing?

On average over the last three years, Aspen Technology, Inc. has grown earnings per share (EPS) by 2.4% each year (using a line of best fit). Its revenue is up 12% over last year.

This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Aspen Technology, Inc. Been A Good Investment?

I think that the total shareholder return of 207%, over three years, would leave most Aspen Technology, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Antonio Pietri is paid around the same as most CEOs of similar size companies.

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. So you may want to check if insiders are buying Aspen Technology shares with their own money (free access).

Important note: Aspen Technology 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.