Dave Mosley became the CEO of Seagate Technology plc (NASDAQ:STX) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Seagate Technology plc's CEO Compensation With the industry
Our data indicates that Seagate Technology plc has a market capitalization of US$12b, and total annual CEO compensation was reported as US$12m for the year to July 2020. That's a notable increase of 13% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$8.8m. This suggests that Dave Mosley is paid more than the median for the industry. Furthermore, Dave Mosley directly owns US$16m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Seagate Technology pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Seagate Technology plc's Growth Numbers
Seagate Technology plc's earnings per share (EPS) grew 14% per year over the last three years. In the last year, its revenue is up 1.4%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Seagate Technology plc Been A Good Investment?
Most shareholders would probably be pleased with Seagate Technology plc for providing a total return of 67% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Dave is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Dave's performance creates value for the company.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Seagate Technology that investors should look into moving forward.
Switching gears from Seagate Technology, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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