In 2017 Kunal Kapoor was appointed CEO of Morningstar, Inc. (NASDAQ:MORN). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.
How Does Kunal Kapoor's Compensation Compare With Similar Sized Companies?
Our data indicates that Morningstar, Inc. is worth US$6.8b, and total annual CEO compensation was reported as US$3.5m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$388k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.3m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at Morningstar, below.
Is Morningstar, Inc. Growing?
Morningstar, Inc. has increased its earnings per share (EPS) by an average of 7.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.
This revenue growth could really point to a brighter future. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Morningstar, Inc. Been A Good Investment?
I think that the total shareholder return of 104%, over three years, would leave most Morningstar, Inc. shareholders smiling. 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.
It looks like Morningstar, Inc. pays its CEO less than similar sized companies.
Kunal Kapoor receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Morningstar (free visualization of insider trades).
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.
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