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Doug Merritt has been the CEO of Splunk Inc. (NASDAQ:SPLK) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. 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 Doug Merritt's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Splunk Inc. has a market cap of US$19b, and is paying total annual CEO compensation of US$9.2m. (This number is for the twelve months until January 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$475k. We looked at a group of companies with market capitalizations over US$8.0b and the 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 Doug Merritt receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Splunk has changed over time.
Is Splunk Inc. Growing?
Splunk Inc. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). Its revenue is up 38% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Splunk Inc. Been A Good Investment?
I think that the total shareholder return of 171%, over three years, would leave most Splunk Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Doug Merritt is paid around the same as most CEOs of large companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Splunk shares with their own money (free access).
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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If you spot an error that warrants correction, please contact the editor at email@example.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.