What Did PTC Inc.'s (NASDAQ:PTC) CEO Take Home Last Year?
Jim Heppelmann has been the CEO of PTC Inc. (NASDAQ:PTC) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for PTC
How Does Jim Heppelmann's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that PTC Inc. has a market cap of US$7.5b, and reported total annual CEO compensation of US$11m for the year to September 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$7.7m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that PTC allocates a smaller portion of compensation to salary in comparison to the broader industry.
Thus we can conclude that Jim Heppelmann receives more in total compensation than the median of a group of companies in the same market, and of similar size to PTC Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at PTC has changed from year to year.
Is PTC Inc. Growing?
Over the last three years PTC Inc. has seen earnings per share (EPS) move in a positive direction by an average of 23% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has PTC Inc. Been A Good Investment?
PTC Inc. has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at PTC Inc. 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.
However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Taking a breather from CEO compensation, we've spotted 2 warning signs for PTC (of which 1 is significant!) you should know about in order to have a holistic understanding of the stock.
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.
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.
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. Thank you for reading.
