Dave Nord became the CEO of Hubbell Incorporated (NYSE:HUBB) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Dave Nord's Compensation Compare With Similar Sized Companies?
Our data indicates that Hubbell Incorporated is worth US$8.1b, and total annual CEO compensation was reported as US$7.6m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$6.5m.
So Dave Nord receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Hubbell has changed from year to year.
Is Hubbell Incorporated Growing?
On average over the last three years, Hubbell Incorporated has grown earnings per share (EPS) by 12% each year (using a line of best fit). It achieved revenue growth of 8.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Hubbell Incorporated Been A Good Investment?
I think that the total shareholder return of 36%, over three years, would leave most Hubbell Incorporated shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Dave Nord is close enough to the median pay for a CEO of a similar sized company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Hubbell shares (free trial).
Important note: Hubbell 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.
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