Is Fair Isaac Corporation (NYSE:FICO) Excessively Paying Its CEO?
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Will Lansing has been the CEO of Fair Isaac Corporation (NYSE:FICO) since 2012. 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Fair Isaac
How Does Will Lansing's Compensation Compare With Similar Sized Companies?
According to our data, Fair Isaac Corporation has a market capitalization of US$9.2b, and pays its CEO total annual compensation worth US$12m. (This figure is for the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
As you can see, Will Lansing is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Fair Isaac Corporation 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 Fair Isaac, below.
Is Fair Isaac Corporation Growing?
Over the last three years Fair Isaac Corporation has grown its earnings per share (EPS) by an average of 14% per year (using a line of best fit). Its revenue is up 11% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Fair Isaac Corporation Been A Good Investment?
Boasting a total shareholder return of 185% over three years, Fair Isaac Corporation 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.
In Summary...
We compared total CEO remuneration at Fair Isaac Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Fair Isaac insiders are buying or selling shares.
If you want to buy a stock that is better than Fair Isaac, this free list of high return, low debt companies is a great place to look.
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.
