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Is Comtech Telecommunications Corp.’s (NASDAQ:CMTL) CEO Being Overpaid?

Simply Wall St

Fred Kornberg has been the CEO of Comtech Telecommunications Corp. (NASDAQ:CMTL) since 2016. 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. 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.

Check out our latest analysis for Comtech Telecommunications

How Does Fred Kornberg’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Comtech Telecommunications Corp. has a market cap of US$545m, and is paying total annual CEO compensation of US$3.4m. (This is based on the year to July 2018). While we always look at total compensation first, we note that the salary component is less, at US$760k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.6m.

As you can see, Fred Kornberg is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Comtech Telecommunications Corp. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Comtech Telecommunications, below.

NasdaqGS:CMTL CEO Compensation, March 16th 2019

Is Comtech Telecommunications Corp. Growing?

Comtech Telecommunications Corp. has increased its earnings per share (EPS) by an average of 69% a year, over the last three years (using a line of best fit). It achieved revenue growth of 21% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Comtech Telecommunications Corp. Been A Good Investment?

Comtech Telecommunications Corp. has generated a total shareholder return of 0.7% over three years, so most shareholders wouldn’t be too disappointed. 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 Comtech Telecommunications Corp. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. Shareholders may want to check for free if Comtech Telecommunications insiders are buying or selling shares.

Important note: Comtech Telecommunications 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.