U.S. Markets close in 3 hrs 22 mins

Should You Worry About Nutanix, Inc.'s (NASDAQ:NTNX) CEO Pay?

Simply Wall St

In 2009 Dheeraj Pandey was appointed CEO of Nutanix, Inc. (NASDAQ:NTNX). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Nutanix

How Does Dheeraj Pandey's Compensation Compare With Similar Sized Companies?

Our data indicates that Nutanix, Inc. is worth US$3.1b, and total annual CEO compensation was reported as US$6.9m for the year to July 2019. While we always look at total compensation first, we note that the salary component is less, at US$483k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.7m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Nutanix. On a sector level, around 13% of total compensation represents salary and 87% is other remuneration. Nutanix sets aside a smaller share of compensation for salary, in comparison to the overall industry.

So Dheeraj Pandey is paid around the average of 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. You can see, below, how CEO compensation at Nutanix has changed over time.

NasdaqGS:NTNX CEO Compensation April 7th 2020

Is Nutanix, Inc. Growing?

Nutanix, Inc. has reduced its earnings per share by an average of 8.2% a year, over the last three years (measured with a line of best fit). Revenue was pretty flat on last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.

Has Nutanix, Inc. Been A Good Investment?

Since shareholders would have lost about 11% over three years, some Nutanix, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Dheeraj Pandey is paid around what is normal for the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! On another note, we've spotted 3 warning signs for Nutanix that investors should look into moving forward.

Important note: Nutanix 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.

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.

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. Thank you for reading.