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Should You Be Pleased About The CEO Pay At MicroStrategy Incorporated’s (NASDAQ:MSTR)

Armando Maloney

In 1989 Michael Saylor was appointed CEO of MicroStrategy Incorporated (NASDAQ:MSTR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

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How Does Michael Saylor’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that MicroStrategy Incorporated has a market cap of US$1.6b, and is paying total annual CEO compensation of US$656k. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO compensation was US$3.5m.

Most shareholders would consider it a positive that Michael Saylor takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at MicroStrategy, below.

NasdaqGS:MSTR CEO Compensation January 23rd 19

Is MicroStrategy Incorporated Growing?

MicroStrategy Incorporated has reduced its earnings per share by an average of 60% a year, over the last three years. In the last year, its revenue changed by just -0.9%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

You might want to check this free visual report on analyst forecasts for future earnings.

Has MicroStrategy Incorporated Been A Good Investment?

With a three year total loss of 6.7%, MicroStrategy Incorporated would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

It appears that MicroStrategy Incorporated remunerates its CEO below most similar sized companies.

Michael Saylor is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. Shareholders may want to check for free if MicroStrategy insiders are buying or selling shares.

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.