Why Visteon Corporation's (NASDAQ:VC) CEO Pay Matters To You
In 2015 Sachin Lawande was appointed CEO of Visteon Corporation (NASDAQ:VC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
Check out our latest analysis for Visteon
How Does Sachin Lawande's Compensation Compare With Similar Sized Companies?
Our data indicates that Visteon Corporation is worth US$2.3b, and total annual CEO compensation was reported as US$7.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.8m.
Thus we can conclude that Sachin Lawande receives more in total compensation than the median of a group of companies in the same market, and of similar size to Visteon Corporation. However, this doesn't necessarily mean the pay 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 a visual representation of the CEO compensation at Visteon, below.
Is Visteon Corporation Growing?
On average over the last three years, Visteon Corporation has grown earnings per share (EPS) by 7.3% each year (using a line of best fit). Its revenue is down 3.9% over last year.
I would prefer it if there was revenue growth, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Visteon Corporation Been A Good Investment?
With a three year total loss of 8.2%, Visteon Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Visteon Corporation with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling Visteon shares (free trial).
If you want to buy a stock that is better than Visteon, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
