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Is ORBCOMM Inc. (NASDAQ:ORBC) Excessively Paying Its CEO?

Simply Wall St

Marc Eisenberg has been the CEO of ORBCOMM Inc. (NASDAQ:ORBC) since 2008. 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.

Check out our latest analysis for ORBCOMM

How Does Marc Eisenberg's Compensation Compare With Similar Sized Companies?

According to our data, ORBCOMM Inc. has a market capitalization of US$314m, and paid its CEO total annual compensation worth US$2.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$510k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.

As you can see, Marc Eisenberg is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ORBCOMM Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at ORBCOMM has changed over time.

NasdaqGS:ORBC CEO Compensation, January 24th 2020

Is ORBCOMM Inc. Growing?

ORBCOMM Inc. has increased its earnings per share (EPS) by an average of 8.3% a year, over the last three years (using a line of best fit). It saw its revenue drop 6.0% over the last year.

I would prefer it if there was revenue growth, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.

Has ORBCOMM Inc. Been A Good Investment?

With a three year total loss of 52%, ORBCOMM Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount ORBCOMM Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying ORBCOMM shares with their own money (free access).

If you want to buy a stock that is better than ORBCOMM, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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