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Should You Worry About GTT Communications, Inc.’s (NYSE:GTT) CEO Pay?

Ray Foley

In 2007 Rick Calder was appointed CEO of GTT Communications, Inc. (NYSE:GTT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Rick Calder’s Compensation Compare With Similar Sized Companies?

According to our data, GTT Communications, Inc. has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$8.2m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$525k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO compensation of that group was US$3.6m.

As you can see, Rick Calder is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean GTT Communications, Inc. 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.

You can see a visual representation of the CEO compensation at GTT Communications, below.

NYSE:GTT CEO Compensation January 15th 19

Is GTT Communications, Inc. Growing?

Over the last three years GTT Communications, Inc. has shrunk its earnings per share by an average of 120% per year. In the last year, its revenue is up 78%.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.

You might want to check this free visual report on analyst forecasts for future earnings.

Has GTT Communications, Inc. Been A Good Investment?

I think that the total shareholder return of 72%, over three years, would leave most GTT Communications, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

We compared the total CEO remuneration paid by GTT Communications, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Over the last three years returns to investors have been great, though we might have liked stronger business growth. Considering this fine result for investors, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at GTT Communications.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

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.