In 2014 Tom Edman was appointed CEO of TTM Technologies, Inc. (NASDAQ:TTMI). First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Tom Edman's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that TTM Technologies, Inc. has a market cap of US$1.4b, and is paying total annual CEO compensation of US$2.0m. (This figure is for the year to December 2018). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at US$689k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.
A first glance this seems like a real positive for shareholders, since Tom Edman is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at TTM Technologies has changed from year to year.
Is TTM Technologies, Inc. Growing?
Over the last three years TTM Technologies, Inc. has grown its earnings per share (EPS) by an average of 80% per year (using a line of best fit). Its revenue is up 7.1% over last year.
This demonstrates that the company has been improving recently. A good result. 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 TTM Technologies, Inc. Been A Good Investment?
I think that the total shareholder return of 91%, over three years, would leave most TTM Technologies, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It looks like TTM Technologies, Inc. pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Tom Edman deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling TTM Technologies shares (free trial).
If you want to buy a stock that is better than TTM Technologies, this free list of high return, low debt companies is a great place to look.
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