Yahoo Finance Is Align Technology, Inc.'s (NASDAQ:ALGN) CEO Being Overpaid?
In 2015 Joe Hogan was appointed CEO of Align Technology, Inc. (NASDAQ:ALGN). 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 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 Align Technology
How Does Joe Hogan's Compensation Compare With Similar Sized Companies?
According to our data, Align Technology, Inc. has a market capitalization of US$16b, and pays its CEO total annual compensation worth US$42m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.1m. When we examined a group of companies with market caps over US$8.0b, we found that their 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.
Thus we can conclude that Joe Hogan receives more in total compensation than the median of a group of large companies in the same market as Align Technology, Inc.. However, this doesn't necessarily mean the pay 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 a visual representation of the CEO compensation at Align Technology, below.
Is Align Technology, Inc. Growing?
On average over the last three years, Align Technology, Inc. has grown earnings per share (EPS) by 29% each year (using a line of best fit). In the last year, its revenue is up 26%.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Align Technology, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Align Technology, Inc. for providing a total return of 117% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We examined the amount Align Technology, Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Align Technology shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.
