Yahoo Finance How Does iRobot's (NASDAQ:IRBT) CEO Pay Compare With Company Performance?
Colin Angle has been the CEO of iRobot Corporation (NASDAQ:IRBT) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether iRobot pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for iRobot
How Does Total Compensation For Colin Angle Compare With Other Companies In The Industry?
At the time of writing, our data shows that iRobot Corporation has a market capitalization of US$2.0b, and reported total annual CEO compensation of US$6.7m for the year to December 2019. We note that's an increase of 18% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$813k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$5.3m. This suggests that iRobot remunerates its CEO largely in line with the industry average. Moreover, Colin Angle also holds US$24m worth of iRobot stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$813k | US$742k | 12% |
Other | US$5.9m | US$4.9m | 88% |
Total Compensation | US$6.7m | US$5.7m | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. iRobot sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at iRobot Corporation's Growth Numbers
iRobot Corporation has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 3.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 iRobot Corporation Been A Good Investment?
Since shareholders would have lost about 33% over three years, some iRobot Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, iRobot Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. However, earnings growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when earnings growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for iRobot (1 is significant!) that you should be aware of before investing here.
Important note: iRobot is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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