Yahoo Finance Is EchoStar Corporation (NASDAQ:SATS) Excessively Paying Its CEO?
Mike Dugan became the CEO of EchoStar Corporation (NASDAQ:SATS) in 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for EchoStar
How Does Mike Dugan's Compensation Compare With Similar Sized Companies?
According to our data, EchoStar Corporation has a market capitalization of US$3.9b, and pays its CEO total annual compensation worth US$2.0m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
Most shareholders would consider it a positive that Mike Dugan 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.
You can see, below, how CEO compensation at EchoStar has changed over time.
Is EchoStar Corporation Growing?
Over the last three years EchoStar Corporation has shrunk its earnings per share by an average of 20% per year (measured with a line of best fit). It achieved revenue growth of 5.8% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has EchoStar Corporation Been A Good Investment?
EchoStar Corporation has not done too badly by shareholders, with a total return of 3.4%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
It looks like EchoStar Corporation pays its CEO less than similar sized companies.
The compensation paid to Mike Dugan is lower than is usual at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. Whatever your view on compensation, you might want to check if insiders are buying or selling EchoStar shares (free trial).
Important note: EchoStar may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.
