Tom Rutledge became the CEO of Charter Communications, Inc. (NASDAQ:CHTR) in 2012. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Rutledge's Compensation Compare With Similar Sized Companies?
Our data indicates that Charter Communications, Inc. is worth US$110b, and total annual CEO compensation was reported as US$8.2m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$2.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
That means Tom Rutledge receives fairly typical remuneration for the CEO of a large company. 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.
The graphic below shows how CEO compensation at Charter Communications has changed from year to year.
Is Charter Communications, Inc. Growing?
On average over the last three years, Charter Communications, Inc. has shrunk earnings per share by 1.1% each year (measured with a line of best fit). Its revenue is up 4.9% over last year.
In the last three years the company has failed to grow earnings per share. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Charter Communications, Inc. Been A Good Investment?
I think that the total shareholder return of 76%, over three years, would leave most Charter Communications, 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.
Tom Rutledge is paid around the same as most CEOs of large companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Charter Communications.
If you want to buy a stock that is better than Charter Communications, this free list of high return, low debt companies is a great place to look.
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