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Is Cirrus Logic, Inc. (NASDAQ:CRUS) Overpaying Its CEO?

Simply Wall St

Jason Rhode has been the CEO of Cirrus Logic, Inc. (NASDAQ:CRUS) since 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Cirrus Logic

How Does Jason Rhode’s Compensation Compare With Similar Sized Companies?

According to our data, Cirrus Logic, Inc. has a market capitalization of US$2.4b, and pays its CEO total annual compensation worth US$5.9m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$776k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$3.5m.

It would therefore appear that Cirrus Logic, Inc. pays Jason Rhode 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Cirrus Logic, below.

NasdaqGS:CRUS CEO Compensation, March 7th 2019

Is Cirrus Logic, Inc. Growing?

Cirrus Logic, Inc. has reduced its earnings per share by an average of 4.9% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -20%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Cirrus Logic, Inc. Been A Good Investment?

Cirrus Logic, Inc. has generated a total shareholder return of 19% over three years, so most shareholders would 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.

In Summary…

We compared total CEO remuneration at Cirrus Logic, 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.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And shareholder returns are decent but not great. So you may want to delve deeper, because we don’t think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Cirrus Logic shares (free trial).

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

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.