How Should Investors Feel About NetScout Systems, Inc.'s (NASDAQ:NTCT) CEO Pay?
Anil Singhal has been the CEO of NetScout Systems, Inc. (NASDAQ:NTCT) since 1984. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for NetScout Systems
How Does Anil Singhal's Compensation Compare With Similar Sized Companies?
According to our data, NetScout Systems, Inc. has a market capitalization of US$1.9b, and paid its CEO total annual compensation worth US$2.7m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
So Anil Singhal 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 a visual representation of the CEO compensation at NetScout Systems, below.
Is NetScout Systems, Inc. Growing?
Over the last three years NetScout Systems, Inc. has shrunk its earnings per share by an average of 52% per year (measured with a line of best fit). It saw its revenue drop 5.3% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has NetScout Systems, Inc. Been A Good Investment?
Given the total loss of 23% over three years, many shareholders in NetScout Systems, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Anil Singhal is paid around the same as most CEOs of similar size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don't think the CEO is underpaid! Shareholders may want to check for free if NetScout Systems insiders are buying or selling shares.
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 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.
