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Is Motorola Solutions, Inc.'s (NYSE:MSI) CEO Pay Justified?

Simply Wall St

Greg Brown has been the CEO of Motorola Solutions, Inc. (NYSE:MSI) since 2011. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Motorola Solutions

How Does Greg Brown's Compensation Compare With Similar Sized Companies?

Our data indicates that Motorola Solutions, Inc. is worth US$29b, and total annual CEO compensation was reported as US$20m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

It would therefore appear that Motorola Solutions, Inc. pays Greg Brown more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Motorola Solutions, below.

NYSE:MSI CEO Compensation, January 13th 2020
NYSE:MSI CEO Compensation, January 13th 2020

Is Motorola Solutions, Inc. Growing?

On average over the last three years, Motorola Solutions, Inc. has grown earnings per share (EPS) by 25% each year (using a line of best fit). It achieved revenue growth of 10% over the last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Motorola Solutions, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Motorola Solutions, Inc. for providing a total return of 115% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We examined the amount Motorola Solutions, Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Motorola Solutions.

Important note: Motorola Solutions may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.