Andrew Clark became the CEO of Zovio Inc (NYSE:BPI) in 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
How Does Andrew Clark's Compensation Compare With Similar Sized Companies?
According to our data, Zovio Inc has a market capitalization of US$188m, and pays its CEO total annual compensation worth US$2.8m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$746k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.0m.
As you can see, Andrew Clark is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Zovio Inc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Zovio, below.
Is Zovio Inc Growing?
Over the last three years Zovio Inc has grown its earnings per share (EPS) by an average of 117% per year (using a line of best fit). Its revenue is down -6.7% over last year.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has Zovio Inc Been A Good Investment?
With a three year total loss of 34%, Zovio Inc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Zovio Inc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Zovio insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 email@example.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.