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In 2016 Vivek Gupta was appointed CEO of Mastech Digital, Inc. (NYSEMKT:MHH). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Vivek Gupta’s Compensation Compare With Similar Sized Companies?
According to our data, Mastech Digital, Inc. has a market capitalization of US$79m, and pays its CEO total annual compensation worth US$513k. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$359k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$300k.
Thus we can conclude that Vivek Gupta receives more in total compensation than the median of a group of companies in the same market, and of similar size to Mastech Digital, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Mastech Digital has changed over time.
Is Mastech Digital, Inc. Growing?
Mastech Digital, Inc. has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 24%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Mastech Digital, Inc. Been A Good Investment?
I think that the total shareholder return of 91%, over three years, would leave most Mastech Digital, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Mastech Digital, 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 Mastech Digital shares with their own money (free access).
Important note: Mastech Digital may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 email@example.com.