Yahoo Finance Is Alteryx, Inc. (NYSE:AYX) Excessively Paying Its CEO?
Dean Stoecker became the CEO of Alteryx, Inc. (NYSE:AYX) in 1997. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Alteryx
How Does Dean Stoecker's Compensation Compare With Similar Sized Companies?
According to our data, Alteryx, Inc. has a market capitalization of US$6.3b, and paid its CEO total annual compensation worth US$4.5m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$450k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$7.5m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Alteryx. Speaking on an industry level, we can see that nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. So it seems like there isn't a significant difference between Alteryx and the broader market, in terms of salary allocation in the overall compensation package.
Most shareholders would consider it a positive that Dean Stoecker takes less total compensation than the CEOs of most similar size companies, leaving more 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 Alteryx has changed from year to year.
Is Alteryx, Inc. Growing?
On average over the last three years, Alteryx, Inc. has seen earnings per share (EPS) move in a favourable direction by 115% each year (using a line of best fit). Its revenue is up 65% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Alteryx, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Alteryx, Inc. for providing a total return of 540% over three years. 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.
In Summary...
It appears that Alteryx, Inc. remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Dean Stoecker 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 5 warning signs for Alteryx (of which 1 makes us a bit uncomfortable!) 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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