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In 2005 John Stroup was appointed CEO of Belden Inc. (NYSE:BDC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does John Stroup's Compensation Compare With Similar Sized Companies?
Our data indicates that Belden Inc. is worth US$2.3b, and total annual CEO compensation is US$6.3m. (This is based on the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$894k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.
Thus we can conclude that John Stroup receives more in total compensation than the median of a group of companies in the same market, and of similar size to Belden Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Belden has changed from year to year.
Is Belden Inc. Growing?
Belden Inc. has reduced its earnings per share by an average of 4.0% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 5.1% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Belden Inc. Been A Good Investment?
Since shareholders would have lost about 3.7% over three years, some Belden Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Belden Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Belden (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.