Sheila Marcelo became the CEO of Care.com, Inc. (NYSE:CRCM) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Sheila Marcelo's Compensation Compare With Similar Sized Companies?
According to our data, Care.com, Inc. has a market capitalization of US$366m, and paid its CEO total annual compensation worth US$4.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$482k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.8m.
It would therefore appear that Care.com, Inc. pays Sheila Marcelo more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 Care.com has changed from year to year.
Is Care.com, Inc. Growing?
Care.com, Inc. has increased its earnings per share (EPS) by an average of 62% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Care.com, Inc. Been A Good Investment?
With a total shareholder return of 25% over three years, Care.com, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Care.com, Inc., and compared it to remuneration at a group of similar sized companies. 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. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Care.com shares (free trial).
If you want to buy a stock that is better than Care.com, this free list of high return, low debt companies is a great place to look.
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 email@example.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.