Should You Worry About Monotype Imaging Holdings Inc.’s (NASDAQ:TYPE) CEO Salary Level?
In 2016 Scott Landers was appointed CEO of Monotype Imaging Holdings Inc. (NASDAQ:TYPE). 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 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.
View our latest analysis for Monotype Imaging Holdings
How Does Scott Landers’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Monotype Imaging Holdings Inc. has a market cap of US$776m, and is paying total annual CEO compensation of US$4.9m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$490k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.2m.
It would therefore appear that Monotype Imaging Holdings Inc. pays Scott Landers 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 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 Monotype Imaging Holdings has changed over time.
Is Monotype Imaging Holdings Inc. Growing?
Monotype Imaging Holdings Inc. has reduced its earnings per share by an average of 39% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 4.6%.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Monotype Imaging Holdings Inc. Been A Good Investment?
Since shareholders would have lost about 9.7% over three years, some Monotype Imaging Holdings Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We examined the amount Monotype Imaging Holdings Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Monotype Imaging Holdings.
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.
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.
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. Thank you for reading.
