In 2001 Archie Black was appointed CEO of SPS Commerce, Inc. (NASDAQ:SPSC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 Archie Black's Compensation Compare With Similar Sized Companies?
According to our data, SPS Commerce, Inc. has a market capitalization of US$1.9b, and paid its CEO total annual compensation worth US$4.5m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$495k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.
So Archie Black receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 SPS Commerce has changed over time.
Is SPS Commerce, Inc. Growing?
Over the last three years SPS Commerce, Inc. has grown its earnings per share (EPS) by an average of 70% per year (using a line of best fit). Its revenue is up 13% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has SPS Commerce, Inc. Been A Good Investment?
Most shareholders would probably be pleased with SPS Commerce, Inc. for providing a total return of 63% over three years. 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.
Remuneration for Archie Black is close enough to the median pay for a CEO of a similar sized company .
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying SPS Commerce shares with their own money (free access).
If you want to buy a stock that is better than SPS Commerce, this free list of high return, low debt companies is a great place to look.
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