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This article will reflect on the compensation paid to Jeff Green who has served as CEO of The Trade Desk, Inc. (NASDAQ:TTD) since 2009. This analysis will also assess whether Trade Desk pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Jeff Green Compare With Other Companies In The Industry?
Our data indicates that The Trade Desk, Inc. has a market capitalization of US$43b, and total annual CEO compensation was reported as US$12m for the year to December 2019. Notably, that's an increase of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$850k.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.7m. This suggests that Trade Desk remunerates its CEO largely in line with the industry average. What's more, Jeff Green holds US$4.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. It's interesting to note that Trade Desk allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at The Trade Desk, Inc.'s Growth Numbers
Over the past three years, The Trade Desk, Inc. has seen its earnings per share (EPS) grow by 40% per year. Its revenue is up 21% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has The Trade Desk, Inc. Been A Good Investment?
Boasting a total shareholder return of 1,780% over three years, The Trade Desk, Inc. has done well by shareholders. 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.
As we noted earlier, Trade Desk pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Trade Desk that you should be aware of before investing.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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