Yahoo Finance Does Garmin Ltd.'s (NASDAQ:GRMN) CEO Salary Compare Well With Others?
Cliff Albert Pemble has been the CEO of Garmin Ltd. (NASDAQ:GRMN) since 2013. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Garmin
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 paid its CEO total annual compensation worth US$2.9m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 24% of total compensation out of all the companies we analysed, while other remuneration made up 76% of the pie. So it seems like there isn't a significant difference between Garmin and the broader market, in terms of salary allocation in the overall compensation package.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Garmin has changed from year to year.
Is Garmin Ltd. Growing?
Garmin Ltd. has seen earnings per share (EPS) move positively by an average of 11% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Garmin Ltd. Been A Good Investment?
I think that the total shareholder return of 73%, over three years, would leave most Garmin Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
It appears that Garmin Ltd. remunerates its CEO below most large companies.
Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Cliff Albert Pemble deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Taking a breather from CEO compensation, we've spotted 4 warning signs for Garmin (of which 1 is significant!) you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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