Should You Worry About Fair Isaac Corporation’s (NYSE:FICO) CEO Pay?
Will Lansing became the CEO of Fair Isaac Corporation (NYSE:FICO) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. 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.
Check out our latest analysis for Fair Isaac
How Does Will Lansing’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Fair Isaac Corporation has a market cap of US$5.6b, and is paying total annual CEO compensation of US$11m. We note that’s an increase of 35% above last year. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
As you can see, Will Lansing is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Fair Isaac Corporation is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Fair Isaac has changed from year to year.
Is Fair Isaac Corporation Growing?
Fair Isaac Corporation has increased its earnings per share (EPS) by an average of 15% a year, over the last three years In the last year, its revenue is up 11%.
This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Fair Isaac Corporation Been A Good Investment?
Most shareholders would probably be pleased with Fair Isaac Corporation for providing a total return of 109% over three years. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
We compared total CEO remuneration at Fair Isaac Corporation 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 we must not forget that the EPS growth has been very strong 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.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
