In 2013 Eddie Capel was appointed CEO of Manhattan Associates, Inc. (NASDAQ:MANH). 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. 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 Eddie Capel's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Manhattan Associates, Inc. has a market cap of US$5.3b, and is paying total annual CEO compensation of US$4.5m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$575k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.
A first glance this seems like a real positive for shareholders, since Eddie Capel is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Manhattan Associates has changed over time.
Is Manhattan Associates, Inc. Growing?
Over the last three years Manhattan Associates, Inc. has shrunk its earnings per share by an average of 3.8% per year (measured with a line of best fit). Its revenue is up 3.5% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has Manhattan Associates, Inc. Been A Good Investment?
Boasting a total shareholder return of 34% over three years, Manhattan Associates, Inc. has done well by shareholders. 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.
It appears that Manhattan Associates, Inc. remunerates its CEO below most similar sized companies.
It's well worth noting that while Eddie Capel is paid less than most company leaders (at similar sized companies), there isn't much EPS growth. Having said that, returns to shareholders have been great. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling Manhattan Associates shares (free trial).
If you want to buy a stock that is better than Manhattan Associates, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.