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Should You Worry About CAI International, Inc.'s (NYSE:CAI) CEO Salary Level?

Simply Wall St
·3 mins read

In 2011 Victor Garcia was appointed CEO of CAI International, Inc. (NYSE:CAI). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for CAI International

How Does Victor Garcia's Compensation Compare With Similar Sized Companies?

According to our data, CAI International, Inc. has a market capitalization of US$483m, and paid its CEO total annual compensation worth US$2.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$713k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

It would therefore appear that CAI International, Inc. pays Victor Garcia 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.

You can see a visual representation of the CEO compensation at CAI International, below.

NYSE:CAI CEO Compensation, February 6th 2020
NYSE:CAI CEO Compensation, February 6th 2020

Is CAI International, Inc. Growing?

CAI International, Inc. has increased its earnings per share (EPS) by an average of 53% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 20%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has CAI International, Inc. Been A Good Investment?

Boasting a total shareholder return of 93% over three years, CAI International, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at CAI International, Inc. 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.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying CAI International shares with their own money (free access).

If you want to buy a stock that is better than CAI International, 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.