Andrew Anagnost became the CEO of Autodesk, Inc. (NASDAQ:ADSK) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Autodesk.
Comparing Autodesk, Inc.'s CEO Compensation With the industry
According to our data, Autodesk, Inc. has a market capitalization of US$69b, and paid its CEO total annual compensation worth US$12m over the year to January 2020. Notably, that's an increase of 28% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$904k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.7m. This suggests that Autodesk remunerates its CEO largely in line with the industry average. What's more, Andrew Anagnost holds US$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. Autodesk sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Autodesk, Inc.'s Growth Numbers
Autodesk, Inc.'s earnings per share (EPS) grew 120% per year over the last three years. Its revenue is up 17% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Autodesk, Inc. Been A Good Investment?
We think that the total shareholder return of 176%, over three years, would leave most Autodesk, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Autodesk, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Autodesk that investors should think about before committing capital to this stock.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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