Lew Cirne has been the CEO of New Relic, Inc. (NYSE:NEWR) 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 process should give us an idea about how appropriately the CEO is paid.
How Does Lew Cirne's Compensation Compare With Similar Sized Companies?
Our data indicates that New Relic, Inc. is worth US$4.2b, and total annual CEO compensation was reported as US$4.3m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at US$416k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$4.9m.
So Lew Cirne is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at New Relic has changed over time.
Is New Relic, Inc. Growing?
Over the last three years New Relic, Inc. has grown its earnings per share (EPS) by an average of 8.5% per year (using a line of best fit). Its revenue is up 28% over last year.
It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. I'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Shareholders might be interested in this free visualization of analyst forecasts.
Has New Relic, Inc. Been A Good Investment?
Boasting a total shareholder return of 98% over three years, New Relic, 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.
Lew Cirne is paid around what is normal the leaders of comparable size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. Whatever your view on compensation, you might want to check if insiders are buying or selling New Relic shares (free trial).
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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