U.S. markets closed

Does KVH Industries Inc’s (NASDAQ:KVHI) CEO Pay Reflect Performance?

Martin A. Van Heyningen became the CEO of KVH Industries Inc (NASDAQ:KVHI) in 1990. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for KVH Industries

How Does Martin A. Van Heyningen’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that KVH Industries Inc has a market cap of US$205m, and is paying total annual CEO compensation of US$1.2m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$493k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO compensation of that group was US$941k.

So Martin A. Van Heyningen is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at KVH Industries has changed over time.

NasdaqGS:KVHI CEO Compensation December 6th 18

Is KVH Industries Inc Growing?

Over the last three years KVH Industries Inc has shrunk its earnings per share by an average of 69% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has KVH Industries Inc Been A Good Investment?

With a total shareholder return of 13% over three years, KVH Industries Inc shareholders would, in general, 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…

Martin A. Van Heyningen is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We’re not saying the CEO pay is too generous, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. Whatever your view on compensation, you might want to check if insiders are buying or selling KVH Industries shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow 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 editorial-team@simplywallst.com.