Kieran O'Sullivan became the CEO of CTS Corporation (NYSE:CTS) in 2012. 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 Kieran O'Sullivan's Compensation Compare With Similar Sized Companies?
Our data indicates that CTS Corporation is worth US$1.0b, and total annual CEO compensation is US$3.2m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$708k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.3m.
Thus we can conclude that Kieran O'Sullivan receives more in total compensation than the median of a group of companies in the same market, and of similar size to CTS Corporation. However, this doesn't necessarily mean the pay is too high. 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 CTS has changed over time.
Is CTS Corporation Growing?
On average over the last three years, CTS Corporation has grown earnings per share (EPS) by 30% each year (using a line of best fit). In the last year, its revenue is up 11%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has CTS Corporation Been A Good Investment?
Most shareholders would probably be pleased with CTS Corporation for providing a total return of 97% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount CTS Corporation pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling CTS shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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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.