U.S. Markets open in 4 hrs 43 mins

Is iRobot Corporation's (NASDAQ:IRBT) CEO Overpaid Relative To Its Peers?

Simply Wall St

Colin Angle became the CEO of iRobot Corporation (NASDAQ:IRBT) in 1997. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

Check out our latest analysis for iRobot

How Does Colin Angle's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that iRobot Corporation has a market cap of US$1.5b, and reported total annual CEO compensation of US$5.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$742k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.

It would therefore appear that iRobot Corporation pays Colin Angle more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at iRobot has changed over time.

NasdaqGS:IRBT CEO Compensation, January 15th 2020

Is iRobot Corporation Growing?

Over the last three years iRobot Corporation has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). In the last year, its revenue is up 13%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has iRobot Corporation Been A Good Investment?

Given the total loss of 11% over three years, many shareholders in iRobot Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at iRobot Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at iRobot.

If you want to buy a stock that is better than iRobot, 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 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.