In 1989 Michael Saylor was appointed CEO of MicroStrategy Incorporated (NASDAQ:MSTR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Michael Saylor's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that MicroStrategy Incorporated has a market cap of US$1.5b, and reported total annual CEO compensation of US$1.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.
Most shareholders would consider it a positive that Michael Saylor takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at MicroStrategy, below.
Is MicroStrategy Incorporated Growing?
MicroStrategy Incorporated has reduced its earnings per share by an average of 72% a year, over the last three years (measured with a line of best fit). Its revenue is down 3.5% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has MicroStrategy Incorporated Been A Good Investment?
Since shareholders would have lost about 30% over three years, some MicroStrategy Incorporated shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like MicroStrategy Incorporated pays its CEO less than similar sized companies.
Shareholders should note that compensation for Michael Saylor is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MicroStrategy.
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.
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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