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In 2003 Kim McWaters was appointed CEO of Universal Technical Institute, Inc. (NYSE:UTI). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Kim McWaters's Compensation Compare With Similar Sized Companies?
Our data indicates that Universal Technical Institute, Inc. is worth US$86m, and total annual CEO compensation is US$1.3m. (This is based on the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at US$738k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$452k.
It would therefore appear that Universal Technical Institute, Inc. pays Kim McWaters 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Universal Technical Institute has changed over time.
Is Universal Technical Institute, Inc. Growing?
Universal Technical Institute, Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.2%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Universal Technical Institute, Inc. Been A Good Investment?
Universal Technical Institute, Inc. has generated a total shareholder return of 21% 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 Universal Technical Institute, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Shareholders may want to check for free if Universal Technical Institute insiders are buying or selling shares.
Important note: Universal Technical Institute may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 firstname.lastname@example.org. 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.