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Is MTS Systems Corporation's (NASDAQ:MTSC) CEO Paid Enough Relative To Peers?

Simply Wall St

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Jeff Graves became the CEO of MTS Systems Corporation (NASDAQ:MTSC) in 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for MTS Systems

How Does Jeff Graves's Compensation Compare With Similar Sized Companies?

According to our data, MTS Systems Corporation has a market capitalization of US$1.0b, and pays its CEO total annual compensation worth US$2.9m. (This figure is for the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$691k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.4m.

So Jeff Graves is paid around the average of 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 MTS Systems, below.

NasdaqGS:MTSC CEO Compensation, May 7th 2019

Is MTS Systems Corporation Growing?

Over the last three years MTS Systems Corporation has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). It achieved revenue growth of 6.2% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has MTS Systems Corporation Been A Good Investment?

With a total shareholder return of 7.1% over three years, MTS Systems Corporation has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Jeff Graves is paid around what is normal the leaders of comparable size companies.

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MTS Systems (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.