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Dave Nord became the CEO of Hubbell Incorporated (NYSE:HUBB) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Dave Nord’s Compensation Compare With Similar Sized Companies?
According to our data, Hubbell Incorporated has a market capitalization of US$6.3b, and pays its CEO total annual compensation worth US$8.5m. (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$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.4m.
It would therefore appear that Hubbell Incorporated pays Dave Nord 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 better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Hubbell has changed from year to year.
Is Hubbell Incorporated Growing?
Hubbell Incorporated has increased its earnings per share (EPS) by an average of 3.7% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 22%.
I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while performance isn’t amazing, we think it really does seem quite respectable. It could be important to check this free visual depiction of what analysts expect for the future.
Has Hubbell Incorporated Been A Good Investment?
Boasting a total shareholder return of 35% over three years, Hubbell Incorporated has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by Hubbell Incorporated, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hubbell (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 email@example.com.