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Tom Stanton has been the CEO of ADTRAN, Inc. (NASDAQ:ADTN) since 2005. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Stanton's Compensation Compare With Similar Sized Companies?
According to our data, ADTRAN, Inc. has a market capitalization of US$747m, and pays its CEO total annual compensation worth US$2.0m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$656k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
So Tom Stanton 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.
You can see a visual representation of the CEO compensation at ADTRAN, below.
Is ADTRAN, Inc. Growing?
On average over the last three years, ADTRAN, Inc. has shrunk earnings per share by 74% each year (measured with a line of best fit). Its revenue is down -11% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has ADTRAN, Inc. Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in ADTRAN, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Remuneration for Tom Stanton is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Shareholders may want to check for free if ADTRAN insiders are buying or selling shares.
If you want to buy a stock that is better than ADTRAN, 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 firstname.lastname@example.org. 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.