Wes Bush became the CEO of Northrop Grumman Corporation (NYSE:NOC) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. 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 Wes Bush’s Compensation Compare With Similar Sized Companies?
Our data indicates that Northrop Grumman Corporation is worth US$47.5b, and total annual CEO compensation is US$19m. That’s less than last year. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m.
Thus we can conclude that Wes Bush receives more in total compensation than the median of a group of large companies in the same market as Northrop Grumman Corporation. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Northrop Grumman, below.
Is Northrop Grumman Corporation Growing?
On average over the last three years, Northrop Grumman Corporation has grown earnings per share (EPS) by 9.3% each year. Its revenue is up 9.4% over last year.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Northrop Grumman Corporation Been A Good Investment?
Most shareholders would probably be pleased with Northrop Grumman Corporation for providing a total return of 54% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We examined the amount Northrop Grumman Corporation pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Northrop Grumman Corporation (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.