Cliff Albert Pemble became the CEO of Garmin Ltd. (NASDAQ:GRMN) in 2013. First, this article will compare CEO compensation with compensation at other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Cliff Albert Pemble's Compensation Compare With Similar Sized Companies?
According to our data, Garmin Ltd. has a market capitalization of US$15b, and pays its CEO total annual compensation worth US$2.9m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$900k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
A first glance this seems like a real positive for shareholders, since Cliff Albert Pemble is paid less than the average total compensation paid by other large companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Garmin has changed from year to year.
Is Garmin Ltd. Growing?
Over the last three years Garmin Ltd. has grown its earnings per share (EPS) by an average of 9.7% per year (using a line of best fit). In the last year, its revenue is up 6.4%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.
Has Garmin Ltd. Been A Good Investment?
Boasting a total shareholder return of 80% over three years, Garmin Ltd. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Garmin Ltd. pays its CEO less than the average at large companies.
Cliff Albert Pemble receives relatively low remuneration compared to other large companies. And the returns to shareholders were great, over the last few years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Garmin (free visualization of insider trades).
If you want to buy a stock that is better than Garmin, this free list of high return, low debt companies is a great place to look.
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