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Is KVH Industries, Inc. (NASDAQ:KVHI) Overpaying Its CEO?

Simply Wall St

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Martin A. Van Heyningen became the CEO of KVH Industries, Inc. (NASDAQ:KVHI) in 1990. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for KVH Industries

How Does Martin A. Van Heyningen's Compensation Compare With Similar Sized Companies?

According to our data, KVH Industries, Inc. has a market capitalization of US$186m, and pays its CEO total annual compensation worth US$1.3m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$508k. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.

So Martin A. Van Heyningen receives a similar amount to the median CEO pay, amongst 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 a visual representation of the CEO compensation at KVH Industries, below.

NasdaqGS:KVHI CEO Compensation, July 18th 2019

Is KVH Industries, Inc. Growing?

Over the last three years KVH Industries, Inc. has shrunk its earnings per share by an average of 42% per year (measured with a line of best fit). It achieved revenue growth of 6.7% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has KVH Industries, Inc. Been A Good Investment?

KVH Industries, Inc. has generated a total shareholder return of 16% 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...

Remuneration for Martin A. Van Heyningen 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 and we don't think the total returns are amazing. We're not saying the CEO pay is too generous, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. Shareholders may want to check for free if KVH Industries insiders are buying or selling shares.

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.

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.