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How Much Is CTS' (NYSE:CTS) CEO Getting Paid?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Kieran O'Sullivan who has served as CEO of CTS Corporation (NYSE:CTS) since 2012. This analysis will also assess whether CTS pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for CTS

Comparing CTS Corporation's CEO Compensation With the industry

According to our data, CTS Corporation has a market capitalization of US$875m, and paid its CEO total annual compensation worth US$2.4m over the year to December 2019. Notably, that's a decrease of 29% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$750k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.3m. From this we gather that Kieran O'Sullivan is paid around the median for CEOs in the industry. Moreover, Kieran O'Sullivan also holds US$9.0m worth of CTS stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$750k

US$723k

31%

Other

US$1.7m

US$2.7m

69%

Total Compensation

US$2.4m

US$3.4m

100%

Speaking on an industry level, nearly 33% of total compensation represents salary, while the remainder of 67% is other remuneration. Although there is a difference in how total compensation is set, CTS more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

CTS Corporation's Growth

CTS Corporation has reduced its earnings per share by 11% a year over the last three years. In the last year, its revenue is down 12%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has CTS Corporation Been A Good Investment?

With a total shareholder return of 3.0% over three years, CTS Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As previously discussed, Kieran is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, CTS is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for CTS that investors should look into moving forward.

Important note: CTS is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.