How Should Investors React To Huron Consulting Group Inc.'s (NASDAQ:HURN) CEO Pay?
James Roth has been the CEO of Huron Consulting Group Inc. (NASDAQ:HURN) since 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Huron Consulting Group
How Does James Roth's Compensation Compare With Similar Sized Companies?
According to our data, Huron Consulting Group Inc. has a market capitalization of US$1.5b, and paid its CEO total annual compensation worth US$4.8m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. 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 James Roth is paid around the average of 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.
The graphic below shows how CEO compensation at Huron Consulting Group has changed from year to year.
Is Huron Consulting Group Inc. Growing?
On average over the last three years, Huron Consulting Group Inc. has grown earnings per share (EPS) by 14% each year (using a line of best fit). Its revenue is up 9.6% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Huron Consulting Group Inc. Been A Good Investment?
Huron Consulting Group Inc. has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
James Roth is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Huron Consulting Group shares with their own money (free access).
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.
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.
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. Thank you for reading.
