In 2011 Mike Pangia was appointed CEO of Aviat Networks, Inc. (NASDAQ:AVNW). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.
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How Does Mike Pangia’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Aviat Networks, Inc. has a market cap of US$74m, and is paying total annual CEO compensation of US$791k. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$550k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$303k.
It would therefore appear that Aviat Networks, Inc. pays Mike Pangia more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Aviat Networks has changed from year to year.
Is Aviat Networks, Inc. Growing?
On average over the last three years, Aviat Networks, Inc. has grown earnings per share (EPS) by 87% each year (using a line of best fit). In the last year, its revenue is up 2.9%.
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.
We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Aviat Networks, Inc. Been A Good Investment?
Boasting a total shareholder return of 75% over three years, Aviat Networks, Inc. has done well by shareholders. 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.
We examined the amount Aviat Networks, 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, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Aviat Networks shares (free trial).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.