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Eddie Capel became the CEO of Manhattan Associates, Inc. (NASDAQ:MANH) in 2013. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Eddie Capel's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Manhattan Associates, Inc. has a market cap of US$4.0b, and reported total annual CEO compensation of US$4.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$575k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Manhattan Associates stands. On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. Manhattan Associates is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
So Eddie Capel is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Manhattan Associates has changed over time.
Is Manhattan Associates, Inc. Growing?
Over the last three years Manhattan Associates, Inc. has shrunk its earnings per share by an average of 8.8% per year (measured with a line of best fit). In the last year, its revenue is up 8.0%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. 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 Manhattan Associates, Inc. Been A Good Investment?
Boasting a total shareholder return of 36% over three years, Manhattan Associates, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Eddie Capel is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Shifting gears from CEO pay for a second, we've picked out 1 warning sign for Manhattan Associates that investors should be aware of in a dynamic business environment.
If you want to buy a stock that is better than Manhattan Associates, this free list of high return, low debt companies is a great place to look.
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.
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