Steve Pickett became the CEO of RigNet, Inc. (NASDAQ:RNET) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether RigNet pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing RigNet, Inc.'s CEO Compensation With the industry
Our data indicates that RigNet, Inc. has a market capitalization of US$79m, and total annual CEO compensation was reported as US$1.9m for the year to December 2019. We note that's a small decrease of 5.4% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$505k.
In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$1.6m. This suggests that RigNet remunerates its CEO largely in line with the industry average. Moreover, Steve Pickett also holds US$545k worth of RigNet stock directly under their own name.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. According to our research, RigNet has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
RigNet, Inc.'s Growth
Over the last three years, RigNet, Inc. has shrunk its earnings per share by 30% per year. It saw its revenue drop 2.3% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has RigNet, Inc. Been A Good Investment?
Since shareholders would have lost about 77% over three years, some RigNet, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, RigNet pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for RigNet you should be aware of, and 1 of them is significant.
Switching gears from RigNet, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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