U.S. Markets closed

Is Huntington Ingalls Industries, Inc.'s (NYSE:HII) CEO Overpaid Relative To Its Peers?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Mike Petters has been the CEO of Huntington Ingalls Industries, Inc. (NYSE:HII) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

Check out our latest analysis for Huntington Ingalls Industries

How Does Mike Petters's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Huntington Ingalls Industries, Inc. has a market cap of US$9.3b, and is paying total annual CEO compensation of US$5.6m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0. 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.

So Mike Petters receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Huntington Ingalls Industries has changed over time.

NYSE:HII CEO Compensation, July 3rd 2019

Is Huntington Ingalls Industries, Inc. Growing?

Over the last three years Huntington Ingalls Industries, Inc. has grown its earnings per share (EPS) by an average of 23% per year (using a line of best fit). It achieved revenue growth of 10% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Huntington Ingalls Industries, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Huntington Ingalls Industries, Inc. for providing a total return of 40% over three years. 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.

In Summary...

Mike Petters is paid around what is normal the leaders of comparable size companies.

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! So you may want to check if insiders are buying Huntington Ingalls Industries shares with their own money (free access).

If you want to buy a stock that is better than Huntington Ingalls Industries, 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.