Mike Baur has been the CEO of ScanSource, Inc. (NASDAQ:SCSC) since 2000. 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 Mike Baur’s Compensation Compare With Similar Sized Companies?
According to our data, ScanSource, Inc. has a market capitalization of US$877m, and pays its CEO total annual compensation worth US$4.5m. (This number is for the twelve months until 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$875k. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO compensation was US$2.3m.
It would therefore appear that ScanSource, Inc. pays Mike Baur more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at ScanSource has changed from year to year.
Is ScanSource, Inc. Growing?
Over the last three years ScanSource, Inc. has shrunk its earnings per share by an average of 14% per year. It achieved revenue growth of 9.4% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has ScanSource, Inc. Been A Good Investment?
ScanSource, Inc. has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at ScanSource, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ScanSource.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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 firstname.lastname@example.org.