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Does Telephone and Data Systems, Inc.'s (NYSE:TDS) CEO Pay Matter?

Simply Wall St

Ted Carlson became the CEO of Telephone and Data Systems, Inc. (NYSE:TDS) in 1986. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for Telephone and Data Systems

How Does Ted Carlson's Compensation Compare With Similar Sized Companies?

According to our data, Telephone and Data Systems, Inc. has a market capitalization of US$2.9b, and paid its CEO total annual compensation worth US$6.6m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

So Ted Carlson is paid around the average of the companies we looked at. 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 Telephone and Data Systems, below.

NYSE:TDS CEO Compensation, October 2nd 2019

Is Telephone and Data Systems, Inc. Growing?

Telephone and Data Systems, Inc. has increased its earnings per share (EPS) by an average of 45% a year, over the last three years (using a line of best fit). It achieved revenue growth of 2.1% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.

Has Telephone and Data Systems, Inc. Been A Good Investment?

Given the total loss of 0.8% over three years, many shareholders in Telephone and Data Systems, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Ted Carlson is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Telephone and Data Systems.

Important note: Telephone and Data Systems may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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 editorial-team@simplywallst.com. 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.