Patrick Harshman has been the CEO of Harmonic Inc. (NASDAQ:HLIT) since 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.
How Does Patrick Harshman's Compensation Compare With Similar Sized Companies?
According to our data, Harmonic Inc. has a market capitalization of US$685m, and pays its CEO total annual compensation worth US$2.3m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$515k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.7m.
So Patrick Harshman receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Harmonic, below.
Is Harmonic Inc. Growing?
On average over the last three years, Harmonic Inc. has grown earnings per share (EPS) by 21% each year (using a line of best fit). In the last year, its revenue is up 7.7%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Harmonic Inc. Been A Good Investment?
Boasting a total shareholder return of 143% over three years, Harmonic Inc. has done well by shareholders. 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.
Patrick Harshman is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Harmonic shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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