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Is TomTom N.V.'s (AMS:TOM2) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Harold C. Goddijn has been the CEO of TomTom N.V. (AMS:TOM2) since 2001. 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 process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for TomTom

How Does Harold C. Goddijn's Compensation Compare With Similar Sized Companies?

According to our data, TomTom N.V. has a market capitalization of €1.3b, and pays its CEO total annual compensation worth €1.6m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €474k. When we examined a selection of companies with market caps ranging from €888m to €2.8b, we found the median CEO total compensation was €1.6m.

So Harold C. Goddijn is paid around the average of 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.

The graphic below shows how CEO compensation at TomTom has changed from year to year.

ENXTAM:TOM2 CEO Compensation, July 15th 2019

Is TomTom N.V. Growing?

Over the last three years TomTom N.V. has shrunk its earnings per share by an average of 44% per year (measured with a line of best fit). Its revenue is up 4.8% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has TomTom N.V. Been A Good Investment?

Boasting a total shareholder return of 249% over three years, TomTom N.V. 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.

In Summary...

Remuneration for Harold C. Goddijn is close enough to the median pay for a CEO of a similar sized company .

We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Shareholders may want to check for free if TomTom insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.