Yahoo Finance We Think CommScope Holding Company, Inc.'s (NASDAQ:COMM) CEO Compensation Package Needs To Be Put Under A Microscope
Key Insights
CommScope Holding Company will host its Annual General Meeting on 9th of May
CEO Chuck Treadway's total compensation includes salary of US$1.30m
Total compensation is 283% above industry average
CommScope Holding Company's three-year loss to shareholders was 94% while its EPS was down 43% over the past three years
The results at CommScope Holding Company, Inc. (NASDAQ:COMM) have been quite disappointing recently and CEO Chuck Treadway bears some responsibility for this. At the upcoming AGM on 9th of May, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for CommScope Holding Company
Comparing CommScope Holding Company, Inc.'s CEO Compensation With The Industry
Our data indicates that CommScope Holding Company, Inc. has a market capitalization of US$184m, and total annual CEO compensation was reported as US$12m for the year to December 2023. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.
In comparison with other companies in the American Communications industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$3.2m. This suggests that Chuck Treadway is paid more than the median for the industry. Furthermore, Chuck Treadway directly owns US$1.1m worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.1m | 11% |
Other | US$11m | US$9.5m | 89% |
Total Compensation | US$12m | US$11m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that CommScope Holding Company allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at CommScope Holding Company, Inc.'s Growth Numbers
CommScope Holding Company, Inc. has reduced its earnings per share by 43% a year over the last three years. In the last year, its revenue is down 23%.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has CommScope Holding Company, Inc. Been A Good Investment?
Few CommScope Holding Company, Inc. shareholders would feel satisfied with the return of -94% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for CommScope Holding Company (of which 2 are potentially serious!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
