In 2006 Doug Waggoner was appointed CEO of Echo Global Logistics, Inc. (NASDAQ:ECHO). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Doug Waggoner's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Echo Global Logistics, Inc. has a market cap of US$585m, and reported total annual CEO compensation of US$5.6m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$830k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
As you can see, Doug Waggoner is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Echo Global Logistics, 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 a visual representation of the CEO compensation at Echo Global Logistics, below.
Is Echo Global Logistics, Inc. Growing?
Over the last three years Echo Global Logistics, Inc. has grown its earnings per share (EPS) by an average of 68% per year (using a line of best fit). In the last year, its revenue is down 7.0%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Echo Global Logistics, Inc. Been A Good Investment?
Since shareholders would have lost about 12% over three years, some Echo Global Logistics, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Echo Global Logistics, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Echo Global Logistics 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.
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