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In 2011 Greg Brown was appointed CEO of Motorola Solutions, Inc. (NYSE:MSI). First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Greg Brown's Compensation Compare With Similar Sized Companies?
Our data indicates that Motorola Solutions, Inc. is worth US$28b, and total annual CEO compensation is US$20m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
Thus we can conclude that Greg Brown receives more in total compensation than the median of a group of large companies in the same market as Motorola Solutions, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Motorola Solutions has changed over time.
Is Motorola Solutions, Inc. Growing?
Over the last three years Motorola Solutions, Inc. has shrunk its earnings per share by an average of 4.0% per year (measured with a line of best fit). It achieved revenue growth of 15% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Motorola Solutions, Inc. Been A Good Investment?
Boasting a total shareholder return of 168% over three years, Motorola Solutions, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Motorola Solutions, Inc. with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. So you may want to check if insiders are buying Motorola Solutions shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.