This article will reflect on the compensation paid to Eddie Edwards who has served as CEO of CommScope Holding Company, Inc. (NASDAQ:COMM) since 2011. This analysis will also assess whether CommScope Holding Company pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Eddie Edwards Compare With Other Companies In The Industry?
Our data indicates that CommScope Holding Company, Inc. has a market capitalization of US$2.2b, and total annual CEO compensation was reported as US$14m for the year to December 2019. We note that's an increase of 57% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$2.8m. Accordingly, our analysis reveals that CommScope Holding Company, Inc. pays Eddie Edwards north of the industry median. Moreover, Eddie Edwards also holds US$4.0m worth of CommScope Holding Company stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. CommScope Holding Company pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
CommScope Holding Company, Inc.'s Growth
Over the last three years, CommScope Holding Company, Inc. has shrunk its earnings per share by 117% per year. Its revenue is up 50% over the last year.
The reduction in earnings, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has CommScope Holding Company, Inc. Been A Good Investment?
Since shareholders would have lost about 66% over three years, some CommScope Holding Company, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Eddie is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. It concerns us that earnings growth for the company is negative, while share price gains did not materialize over the last three years. In contrast, revenue growth for the company has been showing a positive trend. Few would argue that it's wise for the company to pay any more, before returns improve.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for CommScope Holding Company that investors should look into moving forward.
Important note: CommScope Holding Company is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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