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In 2009 Paul Maleh was appointed CEO of CRA International, Inc. (NASDAQ:CRAI). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Paul Maleh's Compensation Compare With Similar Sized Companies?
Our data indicates that CRA International, Inc. is worth US$297m, and total annual CEO compensation is US$3.0m. (This figure is for the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$710k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.2m.
As you can see, Paul Maleh is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean CRA International, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at CRA International has changed over time.
Is CRA International, Inc. Growing?
Over the last three years CRA International, Inc. has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). In the last year, its revenue is up 11%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has CRA International, Inc. Been A Good Investment?
I think that the total shareholder return of 55%, over three years, would leave most CRA International, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We examined the amount CRA International, 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.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling CRA International shares (free trial).
Important note: CRA International 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 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.