John Sarvis has been the CEO of AVX Corporation (NYSE:AVX) since 2015. 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. 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 John Sarvis's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that AVX Corporation has a market cap of US$2.7b, and is paying total annual CEO compensation of US$1.4m. (This is based on the year to March 2019). That's a notable increase of 22% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$510k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
A first glance this seems like a real positive for shareholders, since John Sarvis is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at AVX, below.
Is AVX Corporation Growing?
On average over the last three years, AVX Corporation has grown earnings per share (EPS) by 33% each year (using a line of best fit). It achieved revenue growth of 3.2% over the last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has AVX Corporation Been A Good Investment?
AVX Corporation has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
It looks like AVX Corporation pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that John Sarvis is paid too much.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. So you may want to check if insiders are buying AVX shares with their own money (free access).
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.
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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.