Alex Davern has been the CEO of National Instruments Corporation (NASDAQ:NATI) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Alex Davern's Compensation Compare With Similar Sized Companies?
Our data indicates that National Instruments Corporation is worth US$5.6b, and total annual CEO compensation is US$3.5m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$725k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.8m.
A first glance this seems like a real positive for shareholders, since Alex Davern 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 National Instruments has changed over time.
Is National Instruments Corporation Growing?
Over the last three years National Instruments Corporation has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). Its revenue is up 2.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has National Instruments Corporation Been A Good Investment?
I think that the total shareholder return of 70%, over three years, would leave most National Instruments Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It appears that National Instruments Corporation remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Alex Davern deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at National Instruments.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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