U.S. markets closed
  • S&P Futures

    3,834.25
    +15.00 (+0.39%)
     
  • Dow Futures

    31,906.00
    +130.00 (+0.41%)
     
  • Nasdaq Futures

    12,370.00
    +72.75 (+0.59%)
     
  • Russell 2000 Futures

    2,209.40
    +8.60 (+0.39%)
     
  • Crude Oil

    65.42
    +0.37 (+0.57%)
     
  • Gold

    1,681.50
    +3.50 (+0.21%)
     
  • Silver

    25.23
    -0.04 (-0.17%)
     
  • EUR/USD

    1.1851
    -0.0001 (-0.01%)
     
  • 10-Yr Bond

    1.5960
    +0.0420 (+2.70%)
     
  • Vix

    25.47
    +0.81 (+3.28%)
     
  • GBP/USD

    1.3828
    +0.0006 (+0.05%)
     
  • USD/JPY

    109.1810
    +0.2800 (+0.26%)
     
  • BTC-USD

    53,293.23
    +1,552.38 (+3.00%)
     
  • CMC Crypto 200

    1,076.71
    +52.51 (+5.13%)
     
  • FTSE 100

    6,719.13
    +88.61 (+1.34%)
     
  • Nikkei 225

    28,725.83
    -17.42 (-0.06%)
     

What Does CarGurus' (NASDAQ:CARG) CEO Pay Reveal?

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

E. Steinert has been the CEO of CarGurus, Inc. (NASDAQ:CARG) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for CarGurus

Comparing CarGurus, Inc.'s CEO Compensation With the industry

Our data indicates that CarGurus, Inc. has a market capitalization of US$2.8b, and total annual CEO compensation was reported as US$2.7m for the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$50k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$2.5m. This suggests that CarGurus remunerates its CEO largely in line with the industry average. Moreover, E. Steinert also holds US$436m worth of CarGurus stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$50k

US$325k

2%

Other

US$2.6m

US$2.4m

98%

Total Compensation

US$2.7m

US$2.7m

100%

Talking in terms of the industry, salary represented approximately 33% of total compensation out of all the companies we analyzed, while other remuneration made up 67% of the pie. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to E. Steinert as compared to non-salary compensation over the one-year period examined. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at CarGurus, Inc.'s Growth Numbers

Over the past three years, CarGurus, Inc. has seen its earnings per share (EPS) grow by 41% per year. In the last year, its revenue changed by just 0.2%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has CarGurus, Inc. Been A Good Investment?

Since shareholders would have lost about 18% over three years, some CarGurus, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

CarGurus prefers rewarding its CEO through non-salary benefits. As previously discussed, E. is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

So you may want to check if insiders are buying CarGurus shares with their own money (free access).

Important note: CarGurus is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.