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Is TrueCar, Inc.'s (NASDAQ:TRUE) CEO Being Overpaid?

Chip Perry became the CEO of TrueCar, Inc. (NASDAQ:TRUE) in 2015. 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. 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.

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Check out our latest analysis for TrueCar

How Does Chip Perry's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that TrueCar, Inc. has a market cap of US$674m, and is paying total annual CEO compensation of US$3.0m. (This is based on the year to December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.

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That means Chip Perry receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at TrueCar, below.

NasdaqGS:TRUE CEO Compensation, May 24th 2019
NasdaqGS:TRUE CEO Compensation, May 24th 2019

Is TrueCar, Inc. Growing?

TrueCar, Inc. has increased its earnings per share (EPS) by an average of 37% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.0%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has TrueCar, Inc. Been A Good Investment?

Given the total loss of 14% over three years, many shareholders in TrueCar, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Chip Perry is paid around what is normal the leaders of comparable size companies.

We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at TrueCar.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.