Steve Berglund became the CEO of Trimble Inc. (NASDAQ:TRMB) in 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Steve Berglund's Compensation Compare With Similar Sized Companies?
Our data indicates that Trimble Inc. is worth US$9.4b, and total annual CEO compensation was reported as US$11m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$961k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.
As you can see, Steve Berglund is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Trimble 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.
The graphic below shows how CEO compensation at Trimble has changed from year to year.
Is Trimble Inc. Growing?
Trimble Inc. has increased its earnings per share (EPS) by an average of 31% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 12%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Trimble Inc. Been A Good Investment?
Trimble Inc. has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Trimble Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Trimble shares (free trial).
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 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.