U.S. Markets open in 7 hrs 59 mins

Is Telephone and Data Systems Inc’s (NYSE:TDS) CEO Pay Justified?

In 1986 Ted Carlson was appointed CEO of Telephone and Data Systems Inc (NYSE:TDS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Telephone and Data Systems

How Does Ted Carlson’s Compensation Compare With Similar Sized Companies?

Our data indicates that Telephone and Data Systems Inc is worth US$4.1b, and total annual CEO compensation is US$5.7m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.

So Ted Carlson receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Telephone and Data Systems has changed over time.

NYSE:TDS CEO Compensation December 8th 18

Is Telephone and Data Systems Inc Growing?

On average over the last three years, Telephone and Data Systems Inc has grown earnings per share (EPS) by 16% each year. It achieved revenue growth of 1.1% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

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

Has Telephone and Data Systems Inc Been A Good Investment?

Boasting a total shareholder return of 38% over three years, Telephone and Data Systems Inc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Ted Carlson is close enough to the median pay for a CEO of a similar sized company .

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Telephone and Data Systems shares (free trial).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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.