George Kurian has been the CEO of NetApp, Inc. (NASDAQ:NTAP) since 2015. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does George Kurian’s Compensation Compare With Similar Sized Companies?
According to our data, NetApp, Inc. has a market capitalization of US$16b, and pays its CEO total annual compensation worth US$13m. (This is based on the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$925k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
That means George Kurian receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at NetApp, below.
Is NetApp, Inc. Growing?
On average over the last three years, NetApp, Inc. has shrunk earnings per share by 9.3% each year. Its revenue is up 9.7% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has NetApp, Inc. Been A Good Investment?
I think that the total shareholder return of 210%, over three years, would leave most NetApp, 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.
Remuneration for George Kurian is close enough to the median pay for a CEO of a large company .
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for large companies. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NetApp (free visualization of insider trades).
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 email@example.com.