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Is Itron, Inc.'s (NASDAQ:ITRI) CEO Pay Fair?

Simply Wall St

In 2013 Philip Mezey was appointed CEO of Itron, Inc. (NASDAQ:ITRI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 Itron

How Does Philip Mezey's Compensation Compare With Similar Sized Companies?

Our data indicates that Itron, Inc. is worth US$2.4b, and total annual CEO compensation is US$5.0m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$821k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

So Philip Mezey 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.

The graphic below shows how CEO compensation at Itron has changed from year to year.

NasdaqGS:ITRI CEO Compensation, August 1st 2019

Is Itron, Inc. Growing?

On average over the last three years, Itron, Inc. has shrunk earnings per share by 67% each year (measured with a line of best fit). In the last year, its revenue is up 11%.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Itron, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Itron, Inc. for providing a total return of 46% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Philip Mezey is paid around what is normal the leaders of comparable size companies.

We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Itron.

If you want to buy a stock that is better than Itron, 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 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. Thank you for reading.