In 2015 George Kurian was appointed CEO of NetApp, Inc. (NASDAQ:NTAP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does George Kurian's Compensation Compare With Similar Sized Companies?
According to our data, NetApp, Inc. has a market capitalization of US$13b, and pays its CEO total annual compensation worth US$13m. (This is based on the year to April 2019). That's just a smallish increase of 2.4% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$925k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So George Kurian receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at NetApp has changed from year to year.
Is NetApp, Inc. Growing?
Over the last three years NetApp, Inc. has grown its earnings per share (EPS) by an average of 46% per year (using a line of best fit). It saw its revenue drop -2.7% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has NetApp, Inc. Been A Good Investment?
I think that the total shareholder return of 69%, over three years, would leave most NetApp, 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.
George Kurian is paid around what is normal the leaders of larger companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at NetApp.
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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